LMW spins exuberant numbers
Lakshmi Machine Works has hit a 52-week high today at Rs.3575 and it has been doing so consistently since 19th May. It has currently come off the highs but remains up in the green at Rs.3450 levels.
The stock has hit a high after it posted a set of robust numbers for Q4FY14. The company’s net profit rose by a whopping 88% (YoY) at Rs.54 crore on a 26% rise in net sales at Rs.613 crore. Overall cut down in operating costs and an other income of Rs.45 crore, coupled with operational efficiency helped post this very good number. It ended the fiacal with a consolidated net profit at Rs.189 crore, 46%on a 15% rise in net sales at Rs.2261 crore.
It’s the textile machinery unit, its core business which helped the company post these very good set of numbers. It showed a 26% (YoY) jump in topline, contributing 93% to net sales for Q4Fy14. Its EBIT rose 71%. Its Machine Tool & Foundry unit showed a 32% jump in topline and its EBIT spurted up 150% at Rs.5 crore. Its Advanced Technology Center continues to post losses and YoY, the loss remains status quo at Rs.4 crore though sequentially, it has risen from Rs.3 crore.
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 31st March 2014, is sitting on a reserves of Rs.1097 crore and a cash balance of Rs.913 crore and it is virtually debt free. Equity capital is small at Rs.11.27 crore, with promoters stake at 71.66%. Current EPS of Rs.168 (Rs.10 FV) discounts the current price by around 20 times.