Lakshmi Machine
Lakshmi Machine Works has hit a 52-week high at Rs.2411, with an almost 4 times surge in volumes. The stock remains up in the green at Rs.2350 levels.
The stock has hit a high after it posted a set of robust numbers for Q2FY14. On a 9% rise in total income at Rs.561 crore, the company posted a 45% jump in net profit at Rs.52 crore. This time around it is the textile machinery segment which helped the company post these very good numbers, contributing 90% to its turnover. Its EBIT rose 54% (YoY) and up 140% sequentially. Its Advanced Technology Center continues to post losses. The only silver lining is that in Q2 this loss has come down to Rs.2 crore from Rs.4 crore in Q1 and Rs.6 crore in Q2FY13. This Centre is expected to breakeven in the next one or 2 years. Its machine tool and foundry division also did well, showing an over 2 times rise in EBIT.
Plant capacity utilization which over the past two quarters has been very sluggish around 60-65% was back to higher levels. The company’s strategy to focus on customer service and supply of spare parts and the export market seems to be paying off. The company, as at 30th Sept 2013, is sitting on a reserves of Rs.1027 crore and a cash balance of Rs.795 crore and it is virtually debt free. Fundamentally very sound and the H1FY14 EPS of Rs.69 discounts the current price by around 30x. Equity capital is small at Rs.11.27 crore, with promoters stake at 71.66%.