CMP-5119
Lakshmi Machine Works Limited (LMW) a 100% debt free almost 60 years old company is India’s largest textile machinery and CNC Machine Tool manufacturers, based in Coimbatore founded by Cavalier Dr. G.K. Devarajulu. It started its operation in 1962 in Periyanaickenpalayam in Coimbatore city with technical collaboration with Swiss-based textile machinery manufacturer Rieter for textile machines and German based Steel and Ammunition major Krupp.
LMW has 60% market share in the domestic Textile Spinning Machinery Industry. The operations of the company are classified as Textile Machinery Division for spinning preparatory and yarn making machine, Machine Tool Division for CNC lathes and machining centres and Foundry Division for ductile iron and grey iron casting, all the divisions are ISO: 9000 certified.
LMW diversified into CNC Machine Tools and is a brand leader in manufacturing customized products. LMW Foundry makes Precision Castings for industries world over. LMW has added the Advanced Technology Centre to manufacture components for the Aerospace Industry. LMW’s Global presence has grown over the years, with a market presence not only in developing countries, but also in Europe. Lakshmi Machine Works Limited, a leading Textile Machinery Manufacturer in India and one among the three in the world to produce the entire range of Spinning Machinery.
Company has twice bought back the share in order to enchance the investors wealth creation. In 2016 company bought back 3,11,000 equity shares of face value of Rs10/- each excluding the promoter/promoter group at a price of Rs 4,450/- per equity share totaling Rs. 138.39cr while recently in 2018 company bought back 2,66,666 equity shares of face value of Rs10/- each at a price of Rs 6,000/- per equity share totaling Rs. 160cr. Even after such huge buy back the cash and equivalents of the company stands at around Rs 523Cr as of 2019.
Lakshmi Machine has been suggested twice in the Group-:
- 1st Suggested at 4000Rs , back in 2017 since than LMW had touched all time high of 9100Rs giving 127.5% returns.
- 2nd Suggestion was made at 5900 Rs in 2018, since than the stock has performed negatively giving -15% returns.
With the company buying back share at 6000Rs and Huge Cash and Equivalents LMW’s business is a cash cow with strong entry barriers, generating a good amount of free cash flow.
