The just-ended fiscal year was not remarkable for textile machinery manufacturing major Lakshmi Machine Works (LMW). But the company is expecting things to look up in future.
“The spinning sector is doing better; various State Governments have come up with incentives for greenfield projects. By and large, prospects seem better than in the just-ended fiscal,” LMW’s Director of Finance, R. Rajendran told Business Line .
The company’s income from operations for the quarter ended March 2013 rose marginally by Rs 17 lakhs to Rs 502.17 cr compared to the corresponding quarter of the earlier year (Rs 502 cr).
LMW’s quarter-on-quarter net profit, however, increased from Rs 6.98 cr to Rs 28.50 cr.
Rajendran attributed this increase to the taxation provision made during the last quarter of the previous fiscal.
“The order book position as on March-end stood at Rs 3,700 cr, and bookings are happening, unlike in the past, when the consuming sector deferred delivery schedule,” he said.
“Most of the orders are executable this year. The waiting period has been reduced to four to six months. Delivery is no longer a constraint, as large capacities are available and capacity utilisation is around 60-65 per cent,” he added.
Is the company looking to revise its prices? “The input costs have shot up, but we are holding the price (stable). The competition is intense, so the pricing should be acceptable to the market, unlike in the past, when it used to be cost-plus margin.”
The consolidated balance sheet reflects a 26 per cent drop in profit before tax at Rs 183.73 cr against Rs 228.42 cr clocked during the earlier fiscal.
“The profit has slipped because of the loss incurred by the Advanced Technology Centre. The loss is due to depreciation. The approval process is taking time but we are in the process of putting the required facilities in place,” he said, before adding that “the Centre is expected to breakeven in the next one or 2 years.”
LMW has invested around Rs 65 cr towards establishing this Centre. This investment, according to Rajendran, was made anticipating growth in the aerospace sector.
The Board has recommended a dividend of Rs 20 a share for the 2012-13 fiscal. The company is hoping to make the payment before September 4 this year.