LMW Ltd Q2 FY27 Earnings Call: Revenue Jumps 30%, Machine Tools Track 50% Growth

LMW Ltd held its Q2 FY27 earnings call on October 21, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Strong Top Line Across Divisions; TMD Profit Recovery Stands Out

• Consolidated Q2 FY 2026-2027 revenue of Rs.1,153 Cr — up ~30% YoY vs Rs.815 Cr in Q2 FY 2025-2026; H1 FY 2026-2027 revenue at Rs.2,045 Cr vs Rs.1,537 Cr, up 33% YoY.
• TMD Q2 turnover of Rs.639 Cr — management stated a 32% increase vs the previous quarter and 38% growth vs Q2 FY 2025-2026 (Rs.432 Cr); TMD H1 revenue Rs.1,121 Cr vs Rs.876 Cr (~28% up).
• TMD H1 profit of Rs.48 Cr — a sharp recovery from Rs.2 Cr in H1 FY 2025-2026, though management gave no EBITDA margin guidance for textiles.
• PPD at Rs.204 Cr for H1 FY 2026-2027 — vs Rs.93 Cr in H1 FY 2025-2026, as stated by management.
• Machine Tool Division and Foundry H1 turnover of Rs.794 Cr — vs Rs.555 Cr in H1 FY 2025-2026; foundry is 9% of this turnover, machine tools at 75-80% utilization.
• ATC H1 turnover of Rs.135 Cr — vs Rs.97 Cr in H1 FY 2025-2026; division at ~70% utilization in Q2 FY 2026-2027, with the turnaround driven mainly by composites traction alongside metallics.

Textile Orders Rebuild; Machine Tools Track ~50% Growth

• TMD order book ~Rs.3,400 Cr — of which active order book ~Rs.2,600 Cr as of Q2 FY 2026-2027; ~65-70% of the order book comprises project (expansion-driven) orders.
• Textile machinery net order inflow up ~Rs.200 Cr in Q2 FY 2026-2027 — following decent orders in Q4 FY 2025-2026; TMD sales mix 67% domestic / 8% exports / 25% spares (spares domestic-only).
• Machine tool division tracking ~50% growth in FY 2026-2027 — on consistent order inflows, China-plus-one now visible on the ground, and strong machine-upgradation demand; management aspires to grow "way beyond" the industry's growth rate (no numeric target given).
• MTD demand mix — auto sector remains predominant at a little upwards of 50% of deliveries; defense, EMS and tooling all expanding; machining centers gaining footprint vs turning centers (~23-24% machining centers / 76% turning centers).
• ATC order book unchanged at ~Rs.1,000 Cr — split ~30% composites / 70% metallics, to be completed over the next 3-3.5 years (analyst's figure); management declined to give a specific target for scaling it toward Rs.2,000-3,000 Cr.
• Overseas subsidiaries — LMW Global H1 FY 2026-2027 turnover Rs.100 Cr (vs Rs.71 Cr) with export order book ~Rs.163 Cr; LMW China H1 turnover Rs.36 Cr (vs Rs.41 Cr) with order book ~Rs.128 Cr.

$2-2.5 Bn Market, Import Substitution and Rapid Scalability

• India machine tools market at 17,000-18,000 machines / $2-2.5 bn — currently, FY 2026-2027; imports account for 40-45% of volume and ~50-55% of value.
• Management expects imports to fall below 50% of market value (period unspecified) — as global manufacturers now produce in India and supply the domestic market, replacing imports.
• LMW's addressable market is a subset — machines up to 4-axis/4.5-axis with smaller table sizes; a 4-meter table-size machine would address a distinct segment of the $2.5 bn market that LMW does not manufacture today.
• Capacity expansion of 10% on a base of 6,750 machines — an immediate ramp-up in FY 2026-2027; the Rs.10 Cr outlay is only a small statutory/initial amount for declaring the new division location, with a "fairly large ecosystem" of investment around it and existing space repurposed rather than new build.
• Assembly-based model enables rapid scaling — CFO V Senthil said output can be scaled to multiples of stated capacity, including by turning on "the tap" with multiple shifts; standing practice is to expand each time utilization reaches the 80-85% mark. The CFO did not reconcile the exchange filing's 90% utilization figure with the 75-80% cited in opening remarks.
• 5-axis machines traditionally less than 5% of the market — management expects the 5-axis share to gradually increase over time (period unspecified), driven by labor availability and customer preference for a single solution; 5-axis machines are "high value, low volume" with expected higher margins vs imported machines.

Cost Inflation Bites; Policy Support Visible but Pricing Unresolved

• "The costs are hitting us" — CFO V Senthil cited unprecedented cost increases and availability constraints in copper, aluminum and electrical/electronics components, with steel's impact "probably coming much later"; pricing discussion "is on the table" but no price hike was confirmed.
• No quantified margin or pricing guidance for textiles — CFO said it is "very tough to predict anything" given tariffs, geopolitics and second-order cost effects; management remains "very cautious" over the next 6 months (broadly H2 FY 2026-2027).
• Margins moved from negative (FY 2024-2025 and FY 2025-2026) to positive/break-even in Q1-Q2 FY 2026-2027 — but the analyst noted FY23 margins were significantly superior at a similar revenue level; management said "tailwind" is currently more apt for the machine tool division than textiles.
• Third-party policy support — the Karnataka government has introduced a Rs.4,000 crore textile policy; the textile ministry is working to develop 5,000-10,000 new exporters over the next couple of years; the New Zealand FTA is seen as "definitely positive" for customers' customers.
• Industry spindle base expected to move from ~45-50 million toward 70 million (period unspecified) — but the pace is the open question; management estimated 8 million+ spindles were shut industry-wide over the two-year downturn (estimate varies), and concurred spinning may be under-invested as capex skews toward garmenting/fabric/technical textiles.
• Government cotton import duty exemption — provided for the 1 June-31 October window (FY 2026-2027); government is looking positively at incentives again, and garmenting/fabric players are doing well; management hopes for more positives than negatives.
• Auto Conner opportunity of Rs.1,500+ Cr in India (FY 2026-2027) — LMW is the first Indian manufacturer of the Laxmi winder, now commercialized; the winding segment accounts for 25-30% of total spinning mill investment cost per industry thumb rule.

ATC Turnaround Broadens to Indian Defense; New Verticals Only "Enabling"

• Aerospace spans commercial planes and defense — defense includes export sales, and the entire commercial plane business is export-oriented; management did not detail specific part categories when asked.
• Defense ecosystem opportunity — LMW supplies engine parts, special processes and structural components into tier 2/tier 1 chains; management noted large Indian defense contracts (e.g., Rs.15,000-20,000 crores) filter down across many ecosystem players. Business historically 90% exports / 10% Indian ecosystem, with the current increase driven by addressing more of the Indian ecosystem.
• Defense capability in drones, missiles and radar systems — LMW can address everything except electronics (structural parts, assembly, special processes, subassemblies); management declined to name specific programs in the ATC order book, stating only that the programs are publicly known.
• Rs.150 Cr ATC capex yet to be deployed — follows an MOU signed with the Tamil Nadu government, in discussion since Q3 FY 2025-2026; commissioning timeline to be shared "at an appropriate time" (period unspecified). CFO said the analyst's ballpark of Rs.370-400 Cr peak revenue "might seem right" but declined to endorse exact figures.
• Articles of association amendment is purely an "enabling resolution" — covering pharmaceuticals, specialty chemicals, electric vehicles, electronics manufacturing and robotics; no concrete plans committed yet, and stakeholders will be informed when anything concrete evolves.
• ATC metallics stability rests on long-term contracts — with a focus on raising wallet share with existing customers; LMW is not into forging — metallics capability covers machining and special processes, and the company will continue to invest where long-term recovery makes sense.

Cost Discipline Holding; Overseas Losses and Open Questions Remain

• Other expenses grew much slower than revenue in Q1 and Q2 FY 2026-2027 — attributed to deliberate cost-control, digitization and automation, with challenging export markets including Bangladesh as the backdrop; VAVE initiatives have kept COGS from rising significantly despite input cost inflation.
• LMW Global posted a Rs.29.5 Cr loss on Rs.184 Cr revenue in FY 2025-2026 — attributed to challenged markets (Bangladesh, Turkey), expensive overseas locations and unabsorbed fixed costs; management aims to recover via an active order book of ~Rs.300 Cr due for execution over the next 6+ months (H2 FY 2026-2027 onward).
• LMW Holding investments rose from Rs.206 Cr to Rs.377 Cr — CFO said the initial ~Rs.200 Cr was used to buy LMW China (moving it under the Dubai entity) and the money came back; fresh investment is only now beginning to build an external arm with added capacity and stronger international presence.
• FY 2026-2027 capex planned broadly in line with the year's depreciation — some leased assets will come in by end of FY 2026-2027 as machine deliveries roll in, notably five-year ATC contracts that require generating returns within the set contract period.
• Land parcel JV with Infinium Developers — 4.2 acres on a revenue-sharing basis; LMW expects ~20-25% share, estimated at Rs.20-24 Cr, over a 24-30 month door-to-door timeline — some realization in FY 2026-2027 and the remainder in FY 2027-2028.
• AutoWinder delivery ramp-up expected by FY 2027-2028 — currently sold to a few customers in South India and well accepted, but limited to the South; robotic auto-piecing automation is accepted at customers in high-cost geographies (Turkey, where mill worker cost runs upwards of $1,000), though uptake will take time.
• Unanswered analyst questions — the CFO declined to address ATC EBITDA margin potential (analyst suggested 20-23% "easily doable"), a potential MTD EBITDA shift from ~10% to 15-20%, plans to reduce the textile business over the next 2-3 years, and promoter shareholding plans, stating they were "not something which I can answer."