Lokesh Machines Limited Wins ₹42.6 Million Contract for ASMI Submachine Guns from Indian Army

Lokesh Machines Limited has secured a ₹42.6 million contract from the Indian Army for the supply of ASMI submachine guns, marking a significant boost for India's domestic defence manufacturing sector.

In a significant development for India's defence manufacturing sector, Lokesh Machines Limited has secured a contract worth ₹42.6 million (approximately USD 515,000) from the Indian Army's Northern Command. This contract involves supplying 9x19mm ASMI submachine guns with accessories, and the order is expected to be fulfilled by September 28, 2024.

About Lokesh Machines Limited

Established in 1983, Lokesh Machines Limited is a prominent Indian manufacturer specializing in special-purpose machines (SPM), general-purpose machines/CNC lathes (GPM), connecting rods, and machining of cylinder blocks and heads. The company operates through two main divisions:

1. Machines Division: Focuses on manufacturing various types of machinery.

2. Component Division: Specializes in the production of components like connecting rods and cylinder blocks.

Financial Performance

The announcement of the contract had a positive impact on the company’s stock, which closed at ₹408.30 per share, resulting in a market capitalization of ₹755.22 crore. Over the past year, the stock has delivered a remarkable return of approximately 185%.

As of March 2024, the company's shareholding structure includes:

• Promoters: 50.76%
• Foreign Institutional Investors (FIIs): 0.27%
• Public: 48.98%

In Q4 FY24, Lokesh Machines Limited reported revenue of ₹80.34 crore and a net profit of ₹4.69 crore. For the entire fiscal year FY24, the company’s revenue reached ₹294 crore, with a net profit of ₹14 crore, an increase from the ₹10 crore net profit recorded in the previous year.

About the ASMI Submachine Gun

The ASMI submachine gun is the first indigenous small arm ordered by the Indian Army since the INSAS rifle. It was designed by Colonel Prasad Bansod from the Infantry School in Mhow, with support from the Defence Research and Development Organisation (DRDO). The ASMI, meaning pride and self-respect, is a 9x19mm caliber weapon designed for close-quarter combat, offering enhanced mobility and firepower to the troops.

Industry Impact

This contract is a major boost for Lokesh Machines Limited and reflects the Indian government's push towards self-reliance in defence manufacturing. The successful fulfillment of this order could pave the way for more such contracts in the future, enhancing the company's reputation and financial standing.

Future Prospects

With the Indian government focusing on increasing domestic production of defence equipment, companies like Lokesh Machines Limited are well-positioned to benefit from new opportunities. The company's robust financial performance and strategic contracts like the one with the Indian Army are likely to contribute to its growth trajectory.

Conclusion

The awarding of the ₹42.6 million contract to Lokesh Machines Limited by the Indian Army underscores the potential of India's domestic defence manufacturing sector. This achievement not only highlights the capabilities of Lokesh Machines but also marks a step forward in the country's journey towards self-reliance in defence production.

Disclaimer

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to conduct their own research before making any investment decisions.