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The year 2011-12 has been a tough one for textile machinery manufacturer Lakshmi Machine Works (LMW).
The budget did not bring much cheer to the textile industry; the Technology Upgradation Fund Scheme (TUFS) benefit, which was expected to be extended, was a disappointment; nothing much happened on the post-spinning policy and power situation in Tamil Nadu proved disastrous for the industry as a whole.
The Coimbatore-based company's audited results revealed as much. Its net profit for the quarter ended March 2012 slipped to Rs 6.99 crore from Rs 44.36 crore during the corresponding period of the earlier fiscal.
Income from operations fell to Rs 502 crore (Rs 534.84 crore) and profit from operations before other income, finance costs and exceptional items dropped by more than half to Rs 17.55 crore from Rs 38.16 crore during the same period of the previous year.
LMW's Director (Finance), Mr Rajendran, said that the finance cost of Rs 5 crore included tax expense and interest thereon, pertaining to prior periods.
It closed the year with a 17 per cent drop in its net profit at Rs 137.01 crore (Rs 165.98 crore). The top line, however, grew from Rs 1,803.75 crore as at end March 2011 to Rs 2,113.45 crore at the close of the just ended fiscal.
Its performance on the export front also improved to Rs 321 crore (Rs 284 crore) and this included parts exported to its subsidiary in China to the tune of Rs 73 crore.
According to Mr Rajendran, the order book at the start of the year stood at Rs 4,600 crore; it received orders worth Rs 750 crore during the year, executed Rs 1,200-crore worth orders, to close at Rs 4,150 crore.
To sustain and grow in the market, the company also rolled out new range of machineries last year, which according to Mr Rajendran was well received. On the machine tools division performance, he said “it grew 23 per cent. At present, only around 30 per cent of the country's machine tools requirement is being met by domestic manufacturers. There is huge opportunity to grow in this space and we are looking at it.” The overall capacity utilisation level is 70 per cent and the company is working two shifts/day.
The board recommended a dividend of Rs 25 a share and a Golden Jubilee Year dividend of Rs 25/share, aggregating to Rs 50/share of Rs 10 each for the 2011-12 fiscal.
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