Lakshmi Machine Works Ltd. (LMW), an Indian maker of equipment used to make textiles, may fail to bolster its profit this year after a slide in cotton prices forced customers to postpone purchases.
Profit in the year ending March 31 may be about 1.4 billion rupees ($25.6 million), the same as last year, Finance Director R. Rajendran said in a telephone interview yesterday from the southern city of Coimbatore, where the company is based. Group profit fell 9.4 percent last year from the previous period.
The slump in the price of cotton reduced the value of stocks at Indian textile makers, leading to a slowdown in the industry last year, according to the country’s Ministry of Textiles. Cotton has fallen 38 percent in the past year on ICE Futures U.S. in New York on slowing demand in China and an increase in global supplies.
“It will take some time for our customers to recoup their losses of the past year, after which they will start placing new orders,” Rajendran said.
Lakshmi Machine rose 3.6 percent to 1,690 rupees as of 2:14 p.m. in Mumbai. The shares have climbed 14 percent this year, compared with a 13 percent gain in the BSE India Sensitive Index. (SENSEX)
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