01 — At a Glance
The Detective Is On The Case: High P/E, Zero Debt, Zero Growth?
- 52-Week High / Low₹18,250 / ₹13,500
- TTM Revenue (FY25-26)₹3,078 Cr
- TTM PAT₹121 Cr
- TTM EPS₹107.52
- Annualised EPS (Q3 avg ×4)₹83.68
- Book Value₹2,649
- Price to Book5.48x
- Dividend Yield0.21%
- Debt / Equity0.00x
- Order Book (Headline)₹2,600 Cr
Auditor’s Opening Note: LMW closed the December 2025 quarter with ₹758 Cr revenue (flat YoY), ₹41 Cr operating profit, ₹15 Cr PAT and EPS ₹13.72. Annualised EPS using Q3 rule sits at ₹83.68 while TTM EPS is ₹107.52. ROCE 4.48%, ROE 3.04%, zero debt, yet trading at 128x P/E. The textile machinery cycle is still in ICU, aerospace is the only heartbeat. Order book headline ₹2,600 Cr but executable only ₹1,500 Cr. Markets are pricing in a fairy-tale recovery. Detective work begins.
02 — Introduction
Welcome to the Case of the Overpriced Spindle Machine
Picture this: a 100-year-old Coimbatore engineering giant that makes spinning machines, CNC tools, heavy castings and aerospace parts. Zero debt. Cash-rich. Yet the stock trades at 128x earnings while ROCE sits at a sleepy 4.48%. Welcome to Lakshmi Machine Works Ltd — the company your grandfather’s textile mill still swears by, now quietly pivoting to rockets and data-centre precision bits.
Q3 FY26 numbers are out. Revenue flat at ₹758 Cr. Operating profit ₹41 Cr. PAT ₹15 Cr. The textile division is still running five-day weeks and sub-50% utilisation. Machine tools and foundry are doing better. Aerospace order book just jumped 20% to ₹360 Cr deliverable over 1.5 years. Management is doing VRS, lean ops, and IoT upgrades — classic detective moves when the cycle refuses to turn.
Feb 2026 concall was pure gold: “We anticipated a bounce after 18 months of slowdown… it has not happened.” Translation: textile mills are running 95% utilisation but refusing to buy new spindles because of policy uncertainty. Meanwhile the company is sitting on ₹2,600 Cr headline order book and zero borrowings. This is not a growth story. This is a valuation mystery wrapped in a cyclical enigma.
Concall Note (Feb 2026): “This is the time for us to become lean… increase our efficiencies… and this is the time for us to invest.” — LMW Management. They also confirmed VRS cost of ₹1.29 Cr and one-time Labour Code impact of ₹11.5 Cr.
03 — Business Model: WTF Do They Even Do?
They Make Machines That Make Thread. And Rockets. And Tools.
LMW is four businesses in one trench coat. Textile Machinery Division (73.6% revenue) sells spinning machines — the things that turn cotton into yarn. Machine Tool Division (17.8%) makes CNC lathes and machining centres for auto and engineering shops. Foundry (2.3%) casts heavy metal bits (70% internal use). Advanced Technology Centre (3.4%) supplies precision metallic and composite parts to ISRO, global aerospace OEMs and now composites for space.
Revenue split FY25: 84% domestic, 16% exports. 3,590 permanent employees. R&D at 2.2% of revenue. Capex at 15.5% of revenue — all going into automation, IoT and bigger machining centres. Order book as of Feb 2026: ₹2,600 Cr headline (TMD ₹2,600 Cr but only ₹1,500 Cr executable). Capacity utilisation: TMD sub-50%, MTD & Foundry ~70%.
Simple business? Yes. Cyclical? Like a monsoon in Chennai. One good year and everyone orders 10,000 spindles. One bad year and you’re running five-day weeks and doing VRS.
TMD Revenue73.6%Spinning machines
MTD Revenue17.8%CNC tools
Foundry2.3%Castings
ATC3.4%Aerospace
Royalty? None. Promoter holding steady at 30.8%. Zero pledge. The only royalty here is the market paying 128x for 4.48% ROCE. Classic desi over-enthusiasm.
💬 Drop a comment: Would you buy a spinning machine company at 128x P/E just because it has zero debt and makes rocket parts? Detective wants to know.
04 — Financials Overview
Q3 FY26: The Numbers Don’t Lie, But The Valuation Does
Result type: Quarterly Results | Q3 FY26 EPS: ₹13.72 | Annualised EPS (Q1+Q2+Q3 avg ×4): ₹83.68 | TTM EPS: ₹107.52
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 758 | 766 | 822 | -1.07% | -7.8% |
| Operating Profit | 41 | 35 | 44 | +17.1% | -6.8% |
| OPM % | 5% | 5% | 5% | 0 bps | 0 bps |
| PAT | 15 | 19 | 41 | -21% | -63% |
| EPS (₹) | 13.72 | 18.07 | 38.30 | -24% | -64% |
P/E Recalculated: TTM PAT ₹121 Cr ÷ 1.07 Cr shares = EPS ₹113.08. CMP ₹14,503 ÷ ₹113.08 = 128.3x (matches dump). Industry median P/E 27x. LMW trades at 4.7x the median. Operating profit up YoY only because of cost cuts and VRS. Revenue down. The market is betting on a textile supercycle that management itself says “has not happened”.
05 — Valuation: Fair Value Range
What’s This Company Actually Worth?
Join 10,000+ investors who read this every week.
