Lakshmi Machine Works has reported a drop in net profit by Rs 8.37 crore to Rs 25.37 crore during the first quarter of the current fiscal compared to the corresponding quarter of the earlier year.

The Coimbatore-headquartered textile machinery manufacturing major’s profitability is said to have been impacted due to the recessionary conditions in the automobile industry among others.

The company Director (Finance) R. Rajendran told Business Line that the textile machinery division showed signs of improvement, but the machine tools and foundry division were hit because the economy itself was passing through a difficult phase.

While the profit (before interest and tax) of the textile machinery division fell to Rs 25.19 crore from Rs 31.47 crore a year ago, the machine tools and foundry division’s profitability nosedived to Re 0.62 crore (Rs 5.77 crore). The Advanced Technology Centre is yet to turnaround.

“Capacity utilisation level has dropped to around 65 per cent,’’ he added.

TUF Scheme

He also observed that there were deferments/delays in textile machinery off-take as the mill sector awaited sanctions under the TUF (Technology Upgradation Fund) Scheme.

“Though it has been agreed in-principle for continuation of the TUF Scheme during the 12th Plan Period, there is some delay in loan sanction,’’ Mr Rajendran said.

To beat the slowdown, the company is focusing on customer service and supply of spare parts and the export market. “There is huge requirement on the export front, including in markets like China, Turkey and Pakistan,’’ he said.

Meanwhile the Rs 10 face value share of the company touched a high of Rs 1,849 on Monday, before closing at Rs 1,837.70 on the NSE.

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