LML posts net loss of Rs 22 m - Views on News from Equitymaster

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LML posts net loss of Rs 22 m

Jan 31, 2000

LML, India's second largest manufacturer, has recorded a loss of Rs 22.3 m in 3QFY2000. The company has been affected adversely from the structural shift in the two-wheeler segment towards motorcycles, away from scooters. The 5.6% drop in sales could not offset the 0.9% fall in operating expenditure. Operating profit fell by over 60%. The reduction in interest burden (down 8.0%) and depreciation (down 6.6%) could not pull the company out of the red.

(Rs m) 3QFY2000 3QFY1999 Change
Gross Sales 1,892.5 2,004.8 -5.6%
Other Income 17.9 8.7 105.7%
Expenditure 1,810.8 1,826.7 -0.9%
Interest 65.3 71.0 -8.0%
Depreciation 56.6 60.6 -6.6%
Profit before Tax (22.3) 55.2  
Tax - 14.1  
Profit after Tax/(Loss) (22.3) 41.1  
Net profit margin (%) -1.2% 2.1%  

LML plans to launch motorcycles to spread its risks more effectively. It has entered into a technical tie-up with Korean two-wheeler major - Daelim for its motorcycle venture.

Market view:
In view of declining sales in the scooter segment, and added burden on margins with planned forays in motorcycles and scooterettes, analysts have flagged LML as a 'SELL'. Loss in 3QFY2000, seems to have reinforced analyst views.

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May 14, 2018 (Close)