Why Did Lloyds Engineering Experience a 20% Profit Drop?
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Synopsis
Lloyds Engineering Works Limited reports a significant decrease in net profit for Q4 FY25. Despite reduced expenses, the company faces challenges with declining revenue and rising costs. This article delves into the factors behind this downturn and its implications for the future.
Key Takeaways
- 20% drop in net profit for Q4 FY25.
- Revenue decreased by 12.86%.
- Total expenses reduced by 10.75%.
- Employee benefits expenses increased by 11.79%.
- Manufacturing costs surged by 58.28%.
Mumbai, May 7 (NationPress) Lloyds Engineering Works Limited (LEWL), previously known as Lloyds Steels Industries Limited, disclosed on Wednesday a 20% decrease in its net profit for the fourth quarter (Q4) of FY25. The company's net profit for Q4 was reported at Rs 16.87 crore, a reduction from Rs 21.13 crore in the prior quarter (Q3), as per its filing with the stock exchange.
This profitability dip occurred despite a 10.75% reduction in overall expenses. In Q4, total expenses amounted to Rs 203.29 crore, down from Rs 227.77 crore in Q3.
Nevertheless, the revenue decline and a significant increase in certain cost categories significantly impacted the company's bottom line.
Revenue from operations dropped by 12.86%, coming in at Rs 231.96 crore in Q4 compared to Rs 266.20 crore in the previous quarter.
Total revenue, accounting for other income, fell by 13.5% to Rs 238.72 crore in the last quarter of FY25 from Rs 276.01 crore in the earlier quarter.
Other income saw a decline of 30.92%, falling to Rs 6.77 crore from Rs 9.8 crore.
Moreover, the company experienced a notable rise in employee benefit expenses, which surged by 11.79% to Rs 17.18 crore in Q4 from Rs 15.37 crore in Q3.
Additionally, manufacturing and other expenses soared by 58.28% to Rs 48.01 crore in Q4 from Rs 30.33 crore in the previous quarter.
Consequently, profit before tax also fell by 26.52% to Rs 35.44 crore in Q4 from Rs 48.23 crore in Q3.
As of around 3:18 p.m., shares of Lloyds Engineering Works Limited were trading flat at Rs 52.92, up by Rs 0.94 or 1.81% on the National Stock Exchange (NSE) on Wednesday.
Lloyds Engineering Works Limited specializes in the design and manufacturing of heavy equipment, machinery, and systems for critical industries such as oil and gas, power, steel, and nuclear sectors.
The company also manages turnkey and EPC (Engineering, Procurement, and Construction) projects across various industrial sectors.
Point of View
I believe it is crucial to understand the broader implications of Lloyds Engineering's recent financial performance. While the reported decline in net profit raises concerns, it also highlights the challenges faced by companies in adapting to market fluctuations. Our commitment is to provide insightful analysis that keeps the public informed about such developments.
NationPress
24/05/2025
Frequently Asked Questions
What caused the drop in Lloyds Engineering's net profit?
The decline in net profit was primarily due to a significant drop in revenue despite a reduction in total expenses.
How much did Lloyds Engineering's revenue decline?
Revenue from operations fell by 12.86%, decreasing to Rs 231.96 crore in Q4 from Rs 266.20 crore in the previous quarter.
What were the total expenses for Lloyds Engineering in Q4?
Total expenses were reported at Rs 203.29 crore, down from Rs 227.77 crore in Q3.
What sectors does Lloyds Engineering operate in?
Lloyds Engineering primarily serves the oil and gas, power, steel, and nuclear industries.
What is the impact of rising employee benefits on the company's profit?
The surge in employee benefits expenses, which rose by 11.79%, contributed to the overall decline in profitability.
