Analyst Meet / AGM     29-May-24
Conference Call
Lakshmi Machine Works
Market for TMD still challenging

Lakshmi Machine Works hosted a conference call on May 28, 2024. In the conference call the company was represented by V Senthil,   Chief Financial Officer, and   B. Dhanalakshmi, Senior General Manager.

Key takeaways of the call

TMD order book is Rs 3570 crore (down from Rs 4000 crore as end of Dec 2023 and Rs 5000 crore as end of Mar 2023) and of which the active orders are of about Rs2300 crore (down from Rs 3050 crore as end of Dec 2023).     Export orders were about Rs 300 crore.

The ATC order book is upwards of Rs 200 crore and to be executed over 18 months period.

TMD –Challenging times for textile industry (impact of cotton price on customers) leads to downtrend in order inflow and that is getting reflected on the order book of the company. Nine months of prolonged slowdown in textile sector. However no quarter goes without orders with some or other large players placing orders. Expect at least two more quarter to go to reach normalcy in capacity utilization for TMD. 

MTD – New products are driving growth. Capacity utilization of the company is in the range of 65% and the company’s MTD business still in investment phase. It continues to invest in capacity as it is a growing business for the company.  Since it is building capacity, the margin will improve as operational efficiency kicks in.

ATC –This division manufactures components such as engine parts and other body parts for various aircraft manufacturers. The ATC Business is split into two parts i.e. metallics (90% exports; 10% domestic) and composites. It caters to both domestic and export market.  Invested Rs 20 crore in capacity in FY24.  The ATC capacity is fungible and can produce products depends on the order. The business is of long lead items and thus has large inventory buildup. When there is pull in from the customers the quarterly revenue will be more. Aerospace revenue is Rs 110 crore out of RS 160 crore in FY24.  Export accounted for 90% of the sales of ATC.

TMD business: Project orders are driving the Sales turnover of TMD business as the off take of machines are delayed. The company has cut down the working days per week for TMD business. It is now working only for 5 days a week.  Revised the prices starting April 1, 2024 and this will hold for 2 years. Domestic market share of the company for all textile machines will be about 72% and that at global level will be about 12-15%.

Consolidated Revenue mix TMD: For Q4FY24 Domestic 75%; Exports 12%, spares 13%. For FY24 Domestic 70%, exports 19% and spares 11-12%.

TMD: AutoKoners is under test run and the commercial launch will be in 2 months. The RAP (robotic auto pacing) machine is an automation tool for companies as it substantially reduce man power requirement.

During the fiscal added 5MW of solar power in Q4FY24 taking the overall renewable capacity to 53 MW.

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