Textile machinery manufacturing major Lakshmi Machine Works feels the south is an attractive market for its range of products.
“While new projects are slow in coming and Greenfield projects even fewer in number, the existing mills, I would say, are doing well and going for marginal expansion/ modernisation. Interestingly, more than 40 per cent of our textile machinery sale is in the south zone,” R Rajendran, Chief Financial Officer and Director (Finance), LMW told BusinessLine .
He further pointed out that only about 20 per cent of spinning mills in the south were listed and the rest closely-held companies. “Most of the units have started to look at manufacturing value-added products.”
While the south zone topped in sales, inflow of new orders were primarily from the west, followed by the south and north, he said, adding, “Funding is an issue and high-interest costs are forcing mills to refrain from investing in a big way.”
Notwithstanding the dull investment climate, the company’s order book stood at over ₹2,650 crore (excluding export orders). Income from operations slipped marginally to ₹564.19 crore at the end of the first quarter of the current fiscal compared to ₹571.51 crore during the corresponding quarter of the earlier year.
Its net profit also dipped from ₹48.57 crore a year ago to ₹43.86 crore at the end of the just concluded quarter.Positive outlook
Rajendran is expecting to sustain the same level this quarter. The company’s capacity-utilisation levels have, for some time, hovered around 65-70 per cent.
To a query on the China project, he said “it has started to turn positive. Many new product roll outs are in the offing. We would, in the next four years, offer our entire range of machinery from blow room to ring frame.”