Summary
LMW LIMITED - Q3 FY26 Earnings Call Summary Thursday, January 29, 2026
Event Participants
Executives 2 B. Dhanalakshmi (AVP), V. Senthil (CFO)
Analysts 4 Amit Shah, Divyam Doshi, Jay, Krunal Shah, Manish Goyal
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Quarter) | ₹767 crores | Flat QoQ from ₹776 crores in Sep-25. |
| Revenue (9M FY26) | ₹2,228 crores | +5.1% YoY from ₹2,120 crores in 9M FY25. |
| PBT (Quarter) | ₹56 crores | -5.1% QoQ vs ₹59 crores in previous quarter. |
| PBT (9M FY26) | ₹149 crores | +60.2% YoY vs ₹93 crores in comparative 9M period. |
| Consolidated Revenue (9M) | ₹2,274 crores | -0.6% YoY vs ₹2,288 crores in 9M FY25. |
| Consolidated PAT (9M) | ₹104 crores | +15.5% YoY vs ₹90 crores in 9M FY25. |
| Order Book (TMD) | ₹2,600 crores | Total visibility; actual firm orders stand at ₹1,500 crores. |
| Order Book (ATC) | ₹360 crores | +20% from previous guidance; deliverable over 1.5 years. |
| Capacity Utilization (MTD) | 75% | Management noted significant bandwidth remains for growth. |
| Capacity Utilization (TMD) | < 50% | Currently operating on a five-day week due to lower demand. |
Geographic & Segment Commentary
- Textile Machinery Division (TMD): 9M revenue stood at ₹1,316 crores, a 2% decline YoY. Profitability improved from a loss of ₹23 crores to a loss of ₹1 crore YoY due to efficiency measures. Sales mix remains 65% domestic, 9% exports, and 26% spares, which remain a high-margin consistent driver.
- Machine Tool Division & Foundry (MTD): 9M revenue grew to ₹853 crores from ₹728 crores YoY. Foundry contributes ~12% of this segment’s topline and operates with a clear raw material cost pass-through clause. Demand remains strong for vertical and horizontal machining centers.
- Advanced Technology Centre (ATC): 9M revenue reached ₹150 crores, up from ₹123 crores YoY. Margin improvement was driven by high-value billing in the Composites segment, which now accounts for 20% of revenue. Focus remains on metallic and composite parts for aerospace and space programs.
- LMW Global (Dubai) & LMW China: LMW Global reported a ₹25 crore loss on ₹128 crore revenue due to poor export absorption across Turkey and Bangladesh. LMW China revenue stood at ₹52 crores with an ₹11 crore loss, facing similar investment postponement challenges.
Company-Specific & Strategic Commentary
- Efficiency & Cost Reduction: Implemented a voluntary retirement scheme (VRS) impacting ₹1.29 crores and a ₹11.5 crore provision for the new Labour Code. Management is focusing on lean manufacturing and IoT to lower the fixed cost base during the cyclical downturn.
- New Product Development (NPD): Focus on launching auto winders, high-speed cards (1.25/1.28), and draw frames to maintain market share. In MTD, the J1 and J2 “Drill Tap Centers” are being positioned for the growing Indian Electronics Manufacturing Services (EMS) ecosystem.
- Divestment: The company sold its 10% non-core stake in group company Super Sales India Ltd as part of a strategy to exit non-core investments.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| TMD Recovery | Cycle Recovery Pending | Management expects a bounce-back based on 8-year historical cycles, though currently delayed by tariff uncertainties. |
| ATC Revenue | ₹360 crores | Firm order book deliverable over the next 18 months, assuming no significant customer push-outs. |
| MTD Margins | Stable/Positive | Growth in vertical/horizontal machining centers and market share gains in the electronic machining segment. |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical & Tariffs | Significant uncertainty in key export markets (Turkey, Bangladesh, USA) has led to customer decision postponement. This is particularly impacting the high-margin export segment. |
| Muted Textile Demand | Utilization at TMD remains below 50% with sustained low demand for over 18 months. Management warned that confidence levels among spinning mill investors remain fragile despite government incentives. |
| Commodity Inflation | Rising input costs are a concern; while Foundry has pass-throughs, other divisions rely on value engineering to offset margin pressure as market absorption for price hikes is low. |
Q&A Highlights
TMD Cycle & Indicators
- Question: When will demand pick up given the 18-month slowdown? (Divyam Doshi)
- Answer: Historically, the industry follows 8-year cycles; current delay is due to external tariff uncertainties. Internal indicators show high utilization in existing spinning mills and improved order flow compared to the previous 12 months, but confidence for new investment remains low (V. Senthil).
Subsidiary Losses
- Question: Why are consolidated losses higher than standalone? (Manish Goyal)
- Answer: Export volumes have shrunk to 9-10% of turnover, which is insufficient to absorb the fixed costs of the Dubai holding company (₹25 crore loss) and China operations (₹11 crore loss) (V. Senthil).
Advanced Technology (ATC) Performance
- Question: What drove the double-digit margins in ATC this quarter? (Manish Goyal)
- Answer: Margins were bolstered by specific billings in the Composites segment, which serves space and aerospace programs. Composites represent 20% of the current order book (V. Senthil).
Machine Tool Opportunities (EMS)
- Question: Is LMW supplying to the Foxconn/Apple ecosystem? (Amit Shah)
- Answer: LMW has developed J1 and J2 “Drill Tap” machines specifically for electronic machining. While specific customer names cannot be disclosed due to confidentiality, these machines are sold to the broader EMS ecosystem in India, where market demand is ~7,000-8,000 units annually (V. Senthil).
Key Takeaway
LMW Limited reported a resilient nine-month performance with consolidated PAT growing 15.5% YoY to ₹104 crores, despite a severe cyclical downturn in its core Textile Machinery Division (TMD). While TMD utilization remains sub-50%, forcing a five-day work week, the company has successfully leveraged its Machine Tool Division (MTD) and Advanced Technology Centre (ATC) to offset weakness. MTD is gaining traction in the vertical machining and electronics manufacturing segments (J1/J2 models), while ATC’s order book has climbed to ₹360 crores with improving margins from composites. Management is maintaining a lean cost structure through VRS and labor code provisions, preparing for an eventual upswing in the textile cycle, which is currently hindered by global tariff uncertainties and geopolitical instability in Turkey and Bangladesh. LMW remains well-positioned for recovery due to its debt-free status and continued investment in R&D during this lean period.
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