Lakshmi Electrical Control System Ltd.Incorporated in 1981 and belonging to the high profile LMW group, Lakshmi Electrical Control System Ltd. (LECSL) is primarily engaged in manufacturing of electric and plastic components. Under the electric component division, which contributes nearly 80% of revenue, it makes switchgear and control panel such as contactors, thermal overload relays, control relays, electrical control panels etc. Other electrical components include motor starters and motor control panels. It also provides customised control panels for original equipment manufacturers. All these products are used in industrial applications for power supply and also find application in commercial and residential buildings.

The balance 20% of its revenue comes from industrial plastic component division, which actually supports the manufacture of electrical mountings and components for switchgears. Besides, it manufactures textile machinery components using engineering plastics mainly to cater the demand from Lakshmi Machine Works.

LECSL’s manufacturing facility is located at Arasur, Coimbatore and has a technical collaboration with Sprecher & Schuh, Switzerland, one of the leading manufacturers of low-tension switchgear items in the world. Last year, 4 sophisticated Engel (Austria) injection-moulding machines were installed as a part of the modernization program. Of late, the company has developed additional products like Automatic Power Factor Control Panel (APFC) and Limit Switches with many variants for wide range of applications as also Solenoid Valves in defined executions.

As a part of product diversification, its R&D division has developed a novel system for feeding raw material to the plastics processing machinery under the trade name 'NeumaFeed'. A provisional patent application has also been filed. The other product range is 'LECS Robots' for use in conjunction with plastic injection moulding machines, capable of multiple functions.

Moreover, new products like 4 pole contactors up to 120 A, Autoswitch, ATS Controller etc have been introduced. The company has also installed 1.25 MW wind power plant for tax benefits.

Importantly, LECSL has a wholly owned profit making subsidiary called Harshini Textiles, which manufactures yarn and has a factory in Coimbatore with an installed capacity of 25,200 spindles. It is in the midst of expansion to double its capacity to 50400 spindles. Besides, LECSL also owns 88,800 shares of Lakshmi Machine Works Ltd., which at the CMP of Rs.2650 works out to whopping Rs.23.50 cr. whereas the whole market cap of LECSL is merely Rs.60 cr. The company will declare FY07 results on 31 May and may end FY07 with sales of Rs.68 cr. and net profit of Rs.7.75 cr. Due to its very tiny equity of Rs.2.46 cr., this will translate into an EPS of Rs.32 on a standalone basis and Rs.42 on a consolidated basis. Considering the rising demand for switchgear and control panels for the power and industrial applications, the company is estimated to report sales of Rs.80 cr. with profit Rs.9.25 for FY08 i.e. EPS of Rs.38 on a standalone basis and Rs.50 including Harshini Textile earnings. Investors are strongly recommended to buy it at current levels as share price can double in 15-18 months