Lakshmi Mills Company Ltd Q1 FY26 – 115-Year-Old Textile Dinosaur Spinning Losses, Renting Space to Starbucks, and Fighting Arbitrations
1. At a Glance
Lakshmi Mills Company Ltd (LMC), founded in 1910, is basically the great-grandpa of Indian textiles still hanging around in Coimbatore. With a market cap of ₹585 Cr and a share price of ₹8,400 (yes, you read that right, no bonus split ka ashirwaad here), the company is more a real estate landlord with yarn on the side than a textile powerhouse. The stock is trading at 0.66x book value, but don’t get too excited—book value is inflated by assets older than your grandmom’s wedding saree.
In Q1 FY26, revenue was ₹55.1 Cr, down 15% YoY, while PAT crashed to –₹22 Cr, a mind-blowing –1,600% collapse. Their ROE is –0.6%, ROCE barely 0.86%, and operating margins at a modest 7.25%. The mills employ 2,000+ people, but honestly, the rental income from Zudio, Croma, and Starbucks seems to be keeping the lights on.
So, if you thought this was the OG of South Indian cotton royalty, today it looks more like a textile museum that doubled as a mall.
2. Introduction
Ah, Lakshmi Mills—the name once whispered with pride in Tamil Nadu’s textile corridors, now whispered in auditor’s offices with “arre, ye numbers dekh ke koi chai pilao.”
This is a company older than independent India. Founded in 1910, when most of us were still dealing with British taxation and famine, LMC became synonymous with Coimbatore’s spinning strength. Fast forward to 2025, it’s now synonymous with “mall mein Starbucks, upar mills ka naamplate.”
The contrast is stark. On one side, the textile division accounts for 94.5% of revenue but is bleeding. On the other side, 5.5% comes from rentals, which ironically, is more profitable because chai-sipping teens at Starbucks pay on time while overseas yarn buyers ghost on WhatsApp.
Stock price has delivered a 40% CAGR over 5 years, mainly because of scarcity value—basically, a ₹100 face value stock with just 0.07 Cr shares floating in the market. Demand-supply ka game, not performance ka game.
Question for you: if your textile business keeps losing money, but your property keeps gaining tenants, what would you focus on? Textiles or becoming the next Phoenix Mills of Coimbatore?
3. Business Model – WTF Do They Even Do?
LMC’s business model has two awkward halves:
1. Textiles – Spinning cotton and polyester-blended yarn, fabrics, uniforms, bed linens, and even hospital gowns. They’ve got two major mills:
Palladam Unit: 70,464 spindles, daily 11 tons yarn output, focusing on high-end blends like Modal and Tencel.
Kovilpatti Unit: 62,928 spindles, 12 tons/day, known for PC blends and specialty yarns.
Together, they produce counts from 30s to 120s, high quality by industry standards. But the problem is: margins are thinner than the yarn itself.
2. Rental Business – The OG Coimbatore mill site has been repurposed into a mall-like property hosting Starbucks, Zudio, Adidas, Miniso, Croma, etc. This is LMC’s “side hustle” but honestly, the only thing with a future. Think of it as India’s only textile company where cappuccinos are more profitable than cotton.
So yeah, WTF do they do? Answer: They spin yarn at a loss and rent property at a gain. The management still calls itself a “textile company” out of respect for 1910 nostalgia, but deep inside, they’re inching towards being a landlord.
Would you call this a textile company or a commercial real estate start-up stuck in a time machine?
