LMW Q1 FY27 Results (NSE: LMW)
Signal: Margin expansion
The read
Consolidated PAT of ₹55.52 Cr is a 4.8x YoY spike from a very low base, but sequential PAT declined 13% QoQ; operating margin (7.0%) remains well below pre-slump levels (10%+). The recovery is genuine across segments, but the 'alert' is Textile Machinery's profit of just ₹0.40 Cr on revenue ₹492 Cr — pointing to structural underperformance in the largest division.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹860.72 Cr | +24.0% | -7.8% |
| EBIT | ₹74.52 Cr | +258.0% | |
| Net profit | ₹55.52 Cr | +384.0% | |
| EPS | ₹51.97 | +383.9% | |
| EBIT margin | 7.0% |
P&L walk
Revenue growth of 24% YoY is led by volume recovery across all segments; gross margin expanded 115bps YoY to 38.2% as raw material cost % of revenue declined; EBITDA margin surged 491bps to 7.0%, but the improvement largely reflects fixed-cost absorption rather than operating leverage because absolute employee cost and other expenses grew at nearly the same pace as revenue.
Segments
Textile Machinery Division swung from ₹-24.16 Cr loss to ₹+0.40 Cr profit YoY, a massive turnaround but still negligible margin (0.1%); Machine Tool & Foundry (₹29.09 Cr, +135% YoY) and Advanced Technology Centre (₹13.10 Cr, +224% YoY) drive the group's profits — two out of three segments now solidly profitable.
Key positives
- Consolidated revenue +24% YoY — first YoY growth after 4 consecutive quarters of decline; all three segments positive.
- Machine Tool & Foundry segment profit +135% YoY to ₹29.09 Cr, highest in recent quarters.
- Advanced Technology Centre profit grew 224% YoY to ₹13.10 Cr, signalling successful diversification into defence/aerospace.
- Company is debt-free with zero finance costs.
- Standalone OPM expanded 590bps YoY to 10.0%, showing genuine operating leverage.
Key concerns
- Textile Machinery Division, the largest by revenue (57% of total), generated only ₹0.40 Cr segment profit — near-zero margin (0.08%).
- Consolidated OPM of 7.0%, while improved, is still below the 9-10% run-rate seen in pre-slump quarters.
- QoQ revenue declined 7.8% sequentially (Q4FY26 to Q1FY27), and PAT fell 13% QoQ.
- Company proposes to amend object clause to enter unrelated new-age sectors; may raise concern over strategic focus.
Research and educational content only. Not investment advice.