| Long operational track record and extensive promoters experience
Lamina group commenced operations from 1976. The group is promoted by its directors, Mr. Nitte Vinaya Hegde, Mr. Guruprasad Adyanthaya and Mr. Tonse Ramesh Shenoy who possess experience of more than four decades in casting industry. The extensive experience has enabled the company forge healthy relationships with customers and suppliers and has helped in getting recurring orders from its customers. The same can be reflected in its customer profile which includes names like Tata Motors, Ashok Leyland, Mahindra & Mahindra etc. along with some new one's such as Navistar (USA), Simpsons, which has helped them in developing the presence in domestic as well as international markets. Acuité believes that Lamina Group will continue to benefit from its experienced management to strengthen its business risk profile over the medium term.
Moderation in revenues while maintaining profitability margins
The group’s revenue moderated and stood at Rs.221.96 Cr. in FY24, as against Rs.226.59 Cr. in FY23. The group’s revenue stood at ~Rs.243 Cr. in FY25 (Est.). The marginal decline in the revenues in FY24 was due to price realisations and decrease in the demand of the products.Along with this the Group has also added some new customers to their customer portfolio such as Navistar (USA), Simpsons and among others. For, Lamina Foundries Limited (LFL), approx. 30 percent of revenue is achieved from Ashok Leyland and TATA motors. The Groups’ EBITDA margin stood at 9.52 percent in FY2024 as against 7.98 percent in the previous year FY2023. The reason of improvement in EBITDA margins is due to better absorption of power cost and other expenses. The PAT margins stood at 2.56 percent in FY2024 as against 1.89 percent in FY2023. In FY2025 (Est.) the group estimated to achieve EBITA of 8.90 percent. Acuite believes that the operating performance of the group would improve steadily over the medium term on account of addition of new customers.
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| Working Capital Intensive Operations
The operations of the Lamina Group are working capital intensive with Gross Current Assets (GCA) at 176 days as on March 31, 2024, as against 181 days as on March 31, 2023. The inventory holding days stood at 114 days as on March 31, 2024, as against 110 days as on March 31, 2023. The average inventory holding period of the group is around 120-140 days. The debtor days stood at 47 days as on March 31, 2024, as against 52 days as on March 31, 2023. Average credit period allowed to the customers are around 90 days. The creditors days stood at 45 days as on March 31, 2024, as against 74 days as on March 31, 2023. Average creditor period received from the suppliers is around 90 days. Working capital requirement is funded through bank lines, the average utilisation of bank facilities stood moderate ~77 percent for last 6 months ended as of March 2025. Acuite believes, the operations of the group will remain working capital intensive over the medium term on account of high inventory requirements.
Moderate Financial risk profile
The group has moderate financial risk profile marked by moderate net worth, gearing and debt protection metrics. The tangible net worth of the group stood at Rs. 32.92 Cr. as on March 31, 2024 (includes quasi equity of Rs.16.91 Cr.), as against Rs. 28.46 Cr. as on March 31, 2022 (includes quasi equity of Rs. 16.91 Cr.). The group’s gearing stood at 2.90 times as on March 31, 2024, as against 2.81 times in the March 31, 2023. The total debt of Rs.95.35 Cr. as on March 31, 2024, consists of long-term borrowings of Rs.16.83 Cr., short-term debt of Rs.33.52 Cr., unsecured loan of Rs.41.23 Cr. and CPLTD of Rs.3.77 Cr. Further, the interest coverage ratio (ICR) stood at 1.84 times in FY2024 as against 1.75 times in FY2023. The DSCR stood at 1.55 times in FY2024 as against 1.43 times in FY2023. Total outside Liabilities/Total Net Worth (TOL/TNW) of the group stood at 4.20 times as on 31 March, 2024 as against 4.66 times as on 31 March, 2023. Net Cash Accruals to Total Debt (NCA/TD) of the group stood at 0.10 times for FY2024 and FY2023. Acuite believes that the financial risk profile of the Group is likely to remain moderate in the medium term on account of no major debt funded capex
Susceptibility of profitability to volatility in raw material prices, forex fluctuations and high dependence on end user industry
The group is highly susceptible to volatility in raw material prices. This sector relies heavily on materials like steel, aluminium, and plastics, whose prices fluctuate due to various factors such as supply chain disruptions, geopolitical tensions, and changes in global demand. The inherent unpredictability of these price changes poses a significant risk, necessitating robust risk management strategies to mitigate potential financial impacts. Exports account for ~ 65 per cent in total group revenue in FY25, thus it is exposed to foreign exchange (forex) risk as it does not hedge its exposure to exchange rate fluctuations. Acuite believes, the profit margins of the group likely to remain exposed to inherent cyclicality in the steel industry, volatility in raw material prices and forex risk. Since the company is catering exclusively to the automobile industry for the demand of its products, the fortune of the Lamina group is highly dependent on the performance and cyclicality in the end user industry.
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