Dear Shareholders,
It is with great pleasure that we present to you our annual report for the financial
year 2022-23, reflecting our performance and progress during the year and outlining our
vision for future. Additionally, it fills us with immense joy to announce that we have
reached a significant milestone, completing 40 years of dedicated service in our industry.
On this momentous occasion, we thank all our valued customers, dealers, partners, Board of
Directors and other stakeholders for bestowing their trust, and support upon us.
Economic Perspective
The year gone by unfolded against the backdrop of the global economy, navigating
various obstacles, including multiple challenges and uncertainties stemming from the
impact of a receding pandemic, Russia-Ukraine war, decade-high inflation, energy
shortages, supply chain disruptions and tightening monetary policies in major parts of the
world. Despite this global turmoil, India's economy exhibited remarkable strength,
leveraging robust growth in retail consumption, and increased private sector spending. The
Government's strategic focus on infrastructure development and the successful revival of
the service sector further fortified the economy. Sustaining the momentum, india has
continued to maintain its position as fastest-growing nation with a revised GDP growth of
7.2%. In the coming years, india is poised for a significant period of growth with
comprehensive development across all sectors.
Industry Context
The machine tools market is expected to experience substantial growth due to several
factors, including the rising demand for industrial automation, increased mass production
requirements, and advancements in CNC machines and robotics. Notably, CNC machine tools
hold the largest share in the automotive segment, primarily driven by the enhanced demand
for passenger vehicles from OEMs. Moreover, the market's expansion is further fuelled by a
growing emphasis on enhancing productivity and minimising downtime. The advent of Industry
4.0 is playing a pivotal role in driving digital transformation across the automotive
industry, encompassing automotive OEMs, dealers, suppliers, and other stakeholders. This
trend is positively impacting the demand for CNC machine tools, underscoring a promising
future for the industry.
Standing Tall
At Lokesh Machines, we have consolidated our position as a leading player in the
industry, adeptly addressing market needs in the ever-evolving business environment.
Throughout our four decades of a successful journey, we have weathered more than five
downturns, including the challenges posed by a devastating pandemic. As we continue to
forge ahead, we are diligently strategising to enhance our capabilities and fortify our
resolve to confidently confront future uncertainties and eventualities.
Major Highlights of 2022-23
Enhanced Market Presence:We strengthened our market presence in several geographies by
inducting our in-house personnel who readily support the local dealers. The success of
this approach has instilled confidence in us to expand this model to a wider base.
Increased Capacity: key manufacturing and supply chain bottlenecks were identified, and
significant progress was made in resolving some of them. over the next few quarters, the
remaining issues are expected to be addressed and resolved.
Next Generation Machines: We established partnerships with international technology
companies to ensure our readiness for the next generation of product offerings, catering
to both local and export markets.
Emerging Technologies: We also commenced work on cutting-edge technologies such as
Metal 3D Printing, among others.
Diversification Strategy: We observed promising progress in our diversification plans.
Notably, we even achieved significant breakthroughs in the defence segment, and in the
upcoming years, we plan to bolstering our production to meet growing demand.
During the year under review, we expanded our operations by establishing a dedicated
division for manufacturing defence and aerospace components. Additionally, we have been
actively pursuing emerging opportunities in various sectors, including automotive,
defence, aerospace, and agriculture. The export of engineering goods has experienced
substantial growth, encompassing not only traditional automotive components but a diverse
range of products sourced from India. As a result, there is a growing demand for
engineering goods, and our engineering team is well-prepared with optimal manufacturing
solutions to satisfy the demand.
In terms of product and geographical expansion, in India, we are strategically
realigning our focus on specific industrial clusters, namely Coimbatore and Pune, where we
previously lacked a strong presence. As a result of this refocussing, we are experiencing
promising traction that aligns with our growth plan. We aim to replicate the successes
achieved in these clusters in other major regions throughout the year. Concurrently, we
are actively working to expand our footprint in a couple of overseas markets this year,
strengthening our global presence.
On the product front, we undertook several updates to enhance our existing product
offerings, which received positive feedback from our clients. Additionally, we made
strategic decisions to discontinue a couple of products or streamlining their
specifications to align with adjacent models. This move provides clients with greater
flexibility and enables us to optimise our product range. The machining sector's stability
within the MSME sector is evident as there is a consistent demand for high-value Special
Purpose Machines (SPMs) from Tier-I companies. Our goal is to build on this foundation and
take it a step further by providing next-level General Purpose Machines (GPMs) to meet the
evolving needs of our clients.
robust performance
The year 2022-23 witnessed a robust performance in our financial revenue for the
2022-23 stood at Rs. 244.51 Cr. as compared to Rs. 202.66 Cr. in 2021-22 registering a
surge of 20.65%. EBITDA for 2022-23 stood at Rs. 32.73 Cr. as compared to Rs. 30.58 Cr. in
2021-22 witnessing an uptick of 7.03%. Profit AfterTax for 2022-23 stood at Rs. 9.67 Cr.
as compared to Rs. 6.35 Cr. in 2021-22, a surge of 52.28%. The orderbook as on March 31,
2023 stands at Rs. 216.82 Cr. Going forward, the years are filled with exciting prospects
and numerous opportunities, and this time, we are more prepared than ever to capitalise on
them. With unmatched enthusiasm, Lokesh Machines is poised to ride the next wave of
growth, playing a significant role inindia's journey towards becoming a global
manufacturing hub.
we are actively implementing measures to reduce costs across various aspects of our
operations, enabling us to enhance our competitiveness and efficiency. We have set our
sights on expanding into new territories, exploring untapped markets to reach a wider
customer base and drive business growth.
Integrating technology across value Chain
It is worth mentioning that starting from last year, the majority of our mother
machines have been upgraded with the latest generation machines. This modernisation
process will persist until the middle of next year. This significant upgrade ensures that
our needs are well taken care of for the next decade and beyond. In addition to this, we
have ambitious plans to implement IoT (Internet of Things) and automation for all these
new generation machines. To facilitate data automation, we have already implemented SAP S4
HANA, and we are actively working to further scale up its implementation.
Sustainability focus
At the heart of our business values lies a strong commitment to sustainability, and we
have established ambitious goals and targets for the future. Our sustainability roadmap is
already underway, accompanied by a well-defined action plan to achieve water and carbon
neutrality.
Aligned with our sustainability objectives, we have been actively implementing
operational excellence initiatives to reduce raw material consumption, optimise energy and
water usage, and minimise waste generation.
Strategic priorities
We have five strategic priorities going forward for 2023-24.
We are actively implementing measures to reduce costs across various aspects of our
operations, enabling us to enhance our competitiveness and efficiency our sights on
expanding into new territories, exploring untapped markets to reach a wider customer base
and drive business growth. We are pursuing diversification strategies to venture into
different industries or product lines, diversifying our business portfolio for long-term
sustainability. We are dedicated to developing and enriching our product portfolios,
introducing new and innovative offerings that meet the evolving needs of our customers. We
recognise the importance of a competent and cohesive leadership team; therefore, we are
investing in building a team of skilled professionals who will steer our Company towards
continued success and growth.
Way Forward
As an engineering-intensive manufacturing company, our growth is closely tied to
industrial growth cycles and capital expenditures (Capex). Instead of rapid expansions, we
anticipate steady and measured growth in our machinery business. We have already made
substantial investments to support this consistent growth trajectory. Furthermore, our
diversification efforts are set to significantly accelerate growth in our other divisions,
propelling our overall success in diverse markets. Moving forward, our topmost priority .
We haveset will be to maintain our focus on continuous innovation and seamless execution,
as we envision a future that consolidates our core, while advancing new opportunities.
in Gratitude
In conclusion, I extend my sincere gratitude to all our stakeholders for their firm
dedication, hard work, guidance, and unwavering trust in our endeavours. I eagerly look
forward to our collective growth and success, collaborating hand-in-hand with each of you,
as we strive to realise our shared vision of becoming a prominent global player in the
machine tools industry. Together, we aim to leave a positive impact on the world, making
it a better place for generations to come.
Sincerely,
mullapudi lokeswara rao
Managing Director