LMW's ATC order book triples without explanation, margin guidance reversed
ATC backlog jumps from ₹360 cr over 18 months to ₹1,000 cr over 3-3.5 years; MTD margin recovery timeline withdrawn. Diversification remains exploratory.
What's new
- ATC order book stands at ₹1,000 cr for 3-3.5 years; earlier it was ₹360 cr for 18 months.
- TMD order book is ₹3,200 cr, with ₹2,400 cr active; only orders with 10% deposits are included.
- MTD margins compressed due to lower capacity utilization; management refused to guide on recovery timing.
- Diversification into pharma, specialty chemicals, EV remains an enabling resolution, not a committed plan.
Themes from the call
Demand
TMD order book at ₹3,200 cr (active ₹2,400 cr) with sharp recent inflow; ATC backlog jumps to ₹1,000 cr, mostly export. Textile demand described as gradual recovery, not sharp upcycle.
Margins
MTD margins under pressure from lower capacity utilization; management expects historical 12-14% range but gives no timeline. ATC margins benefited from assembly mix and USD, but expected to normalize.
Capital allocation
ATC new building capex of ₹150 cr over 18-24 months. No other committed capex disclosed. Diversification resolution is exploratory only.
Guidance watch
- ATC execution horizon: ₹1,000 cr over 3-3.5 years, later said 'close to ₹2,000 cr' — unreconciled.
- MTD margin recovery toward 12-14%: no timeline given.
- No consolidated revenue, EBITDA or PAT guidance offered.
- Auto-winder orders expected in last quarter of FY27 after positive southern feedback.
Risk flags
- ATC order book tripling without explanation raises visibility credibility.
- MTD margin compression without recovery timeline; capacity utilization drag may persist.
- LMW Global and China continue to post losses (Global ₹5.6 cr loss, China ₹7 cr loss) with no turnaround plan.
- Diversification resolution is a blank cheque; no project economics disclosed.
Key quotes
-
"Our order books like last quarter we mentioned it is not significantly moved. It's around 360 odd crores which needs to get executed over a period of one and a half years, 18 months."
— LMW management, May 2026 call -
"The order book for ATC is in the region of 1,000 crores for execution over a period of 3 to 3.5 years."
— LMW management, July 2026 call -
"This is a secured order book because we only include orders where we have a 10% deposit."
— V. Senthil, CFO
The brief
LMW's July concall contained two unaddressed reversals. The Advanced Technology Center's order book jumped from ₹360 crore with an 18-month execution horizon to ₹1,000 crore over 3 to 3.5 years. No explanation was offered for the tripling of the backlog or the doubling of the delivery timeline. Meanwhile, Machine Tool Division margins are under pressure — management blamed lower capacity utilization and said a return to the historical 12-14% range would come, but refused to say when. That's a retreat from May's confidence that the margin run rate would 'continue'. The core textile machinery business (TMD) looked solid: a ₹3,200 crore order book, only counting orders with a 10% deposit, suggests real demand. But the ATC numbers and the margin non-guidance weaken the narrative. Outside textiles, the enabling resolution to explore pharma, specialty chemicals and EV remains a placeholder — no project, no capital, no timeline. The stock will focus on whether the ATC order book can be trusted and whether MTD margins have bottomed. The answers are still missing.
LMW's ATC order book grew, but at the cost of clarity. MTD margins are a wait-and-watch. Pick your risk.