MUMBAI: Lakshmi Machine Works (LMW) has a market share of 55% in the domestic textile spinning machinery industry. The company is undergoing an expansion to increase its textile machinery production from 2.3 million spindles in FY07 to 3.5 million spindles in FY08.
The spinning segment of the industry would require 29 million spindles of additional capacity and an investment of Rs 550 billion to meet the expected target of 7% in the global textile industry by 2012.
LMW’s products are priced at a lower rate compared to its competitors. The 15 to 20% discount offered by the company should be matched with reduced delivery time to beat the competitors. The company has a strong focus on R&D and has over a 100 patents for its products.
The company has also reduced its delivery time from 20-24 months to 12-18 months to attract customers who were otherwise going elsewhere.
The company has not witnessed any kind of slow down in the order bookings. The company has continued to witness the order inflows post TUFS extension.
LMW has introduced high yield machines such as vertical machining centers and horizontal machining centers, which are expected to yield higher margins going forward. In the Foundry business, the company has a capacity to produce 4000 tons of high precision castings per month. The company is moving towards manufacturing machine castings, which involve high value addition and also yield higher margins.
LMW is a debt free company with cash on books in excess of Rs6bn. The company as a part of its growth strategy is also looking at inorganic growth through acquisitions mainly in the machine tools and foundry business. The company is also looking at acquiring technology in the textile machinery business.