The business today generates revenue from three principal engineering divisions: textile machinery (TMD), machine tools and foundry (MTD), and the advanced technology center (ATC) that makes metallics and composites mostly for export customers. In Q1 FY27, consolidated revenue was INR902 crore with a profit of INR75 crore; TMD contributed INR482 crore, MTD and foundry INR343 crore, and ATC INR60 crore. The textile machinery order book stands at INR3,200 crore (INR2,400 crore active, secured with 10% deposits), while ATC holds a ~INR1,000 crore order book to be executed over 3–3.5 years. With a 64% domestic sales mix and 26% from spares in TMD, the company earns recurring revenue from an installed base. Its margins are respectable: ATC enjoys favorable product mix and forex tailwinds, MTD runs at 75–80% capacity utilization, though the textile division itself is only at 60% utilization, reflecting softness in that end-market.
The economics persist because the company is not a commodity supplier but a qualified niche player. In ATC, customers put down 10% deposits and order books stretch 3-3.5 years, implying rigorous qualification cycles and high switching costs. The J-series machines have found acceptance in the EMS segment, and the new AutoWinder has generated good feedback, with more orders expected in the last quarter of FY27. The company benefits from a cost advantage on energy versus other countries and passes on input cost increases through price revision clauses in ATC and foundry contracts. The tight cost control is visible: other expenses grew only 4% despite 25% revenue growth. These barriers—deposit-backed order books, specification lock-ins, and an installed base needing spares—make the earnings stream more durable than the blended margin would suggest.
The inflection is happening now, driven by three simultaneous moves. First, ATC is investing INR150 crore in land and building with an 18–24 month timeline to scale capacity; the current INR1,000 crore order book already provides full visibility for that period, and management is actively building the next wave of orders for years 4–6. Second, MTD can increase output by 15% with existing capacity, and margin improvement is tied to reaching full utilization. Third, textile machinery demand is expected to recover gradually as state policies in Gujarat, Odisha, and Madhya Pradesh, plus free trade agreements, drive back-process spinning orders. In 18–24 months, by roughly mid-2028, ATC revenue should be running at a steady annualised clip of INR280–300 crore (from the 3–3.5 year execution of its order book), MTD output should be 15% higher than today, and textile machinery utilization should have moved from 60% toward the mid-70s, lifting segment margins.
On the August 2026 call, management laid out clear commitments: the ATC order book is secured for 3–3.5 years, the INR150 crore capex for the ATC building is on a defined 18–24 month schedule, and additional AutoWinder orders are expected to be booked in the last quarter of FY27. They also flagged cost inflation of 3–3.5% from Middle East tensions and committed to supply-chain resilience and price revisions. Because no earlier concall memos are available, we cannot verify walk-talk against prior promises, but the language is specific and the order book is deposit-backed. The company is making discretionary capex without apparent need for dilution, and it is managing working capital tightly, as evidenced by the modest increase in other expenses relative to revenue.
The earnings visibility is strong: the active TMD order book (INR2,400 crore) plus ATC's INR1,000 crore order book gives multi-year revenue clarity, and MTD can lift output 15% costlessly. If the company executes, consolidated profit could climb from the annualised ~INR300 crore level (Q1 profit INR75 crore) toward INR380–420 crore within 18–24 months, as higher utilization and product mix improvements flow through. The critical falsifiers are threefold: a sustained drop in textile machinery demand that keeps TMD utilization below 60%, a delay in ATC capex or order cancellations, and input cost inflation that cannot be passed on. The tension is that the textile division is still weak, but the profit engine today is MTD and ATC; the recovery in TMD is the upside, not the base case. If cost pressures or supply chain issues (helium, gas) persist, margins could compress, but the order book structure provides a buffer. The single most important watchpoint is the conversion of ATC and TMD order book into revenue without margin erosion, especially as interest rates rise and may influence customers' capex decisions.
companyname: The Lakshmi Mills Company Limited ticker: LAKSHMIMIL sector: Textiles (yarn manufacturing, fabric trading) & Rental Services The Lakshmi Mills Company Limited is a Coimbatore textile company incorporated on 1 April 1910 and listed on BSE (scrip 502958, ISIN INE938C01019). It runs two businesses with very different economics: textile manufacturing and trading, and commercial property rental. In FY25 the textile side lost money while the rental side earned steady income, which explai...
Read the full report →Get valuation models, detailed research reports, thematic primers, one-pagers, risk analysis, growth triggers, bear case, capex tracker, walk the talk, and more for The Lakshmi Mills Company Limited and 4,900+ companies.
5-day free pass. No card required.