Despite the odds the textile industry is facing at present, textile machinery manufacturing major Lakshmi Machine Works has managed to register a net profit of Rs 49.24 cr, up marginally from Rs 45.85 cr clocked during the corresponding second quarter of the previous fiscal.

“Strong financials has helped us tide over the situation,” said LMW's Director (Finance), Mr R. Rajendran.

He conceded that the company was executing projects booked last year. “The off take of machinery is better in the North than by the mills located in the South. Tamil Nadu is having problems. Mills located here had procured cotton when the prices were moving north and the yarn prices slipped; it is a sticky situation and has impacted the industry adversely. Though yarn prices have improved, it is still not clear when the market will improve,” Mr Rajendran told Business Line.

Lakshmi Machine Works is confident of continuing to execute orders booked in 2010-11, he said.

Without disclosing the quantum of drop in order-book position, yet confirming that there has been a decline in order booking during the just-ended quarter compared to the corresponding quarter of the previous year, he said, “our pending order position is around Rs 4600 crore.”

The company's income from operations rose by 31 per cent to Rs 561.41 cr (429.26 cr) and its expenses also swelled to Rs 520.54 cr (Rs 390.40 cr) for the quarter ended September 2011.

Mr Rajendran said the costs were up because of the steep increase in commodity prices such as steel and oil. “Interest costs are also going up and this is a pinch in our vendor's pocket. Our margins are under pressure too,' he added.

Related Topics
comment COMMENT NOW