Lokesh Machines reported a 122% year-on-year surge in standalone net profit for Q1FY26 to ₹101.01 lakh, driven by robust revenue growth in its Components Division. The Hyderabad-based machinery manufacturer also confirmed its removal from the US Office of Foreign Assets Control (OFAC) sanctions list on June 30, 2026, marking the conclusion of regulatory proceedings that had restricted its foreign currency transactions since October 2024.

The Board of Directors, chaired by Whole Time Director Mullapudi Srinivas, approved the unaudited financial results on August 12, 2026. Statutory auditors Brahmayya & Co. issued a limited review report with an unmodified conclusion. The Board also approved the Directors’ Report for FY26 and announced the 42nd Annual General Meeting (AGM) scheduled for September 22, 2026, via video conferencing. E-voting for the AGM will close on September 15, 2026.

Financial Performance Highlights

Revenue from operations rose 15.4% year-on-year to ₹554.57 crore (₹5,545.74 lakh) in Q1FY26, compared to ₹480.47 crore (₹4,804.71 lakh) in Q1FY25. This top-line expansion was underpinned by significant growth in the Components Division, which saw revenue jump nearly eight-fold to ₹155.54 crore (₹1,555.37 lakh) from ₹19.59 crore (₹195.94 lakh) in the prior-year quarter. The Machinery Division contributed ₹402.20 crore (₹4,022.03 lakh), a slight decline from ₹463.64 crore (₹4,636.43 lakh) in Q1FY25.

Profit before tax increased 96.7% to ₹141.32 lakh from ₹71.85 lakh. Net profit after tax more than doubled to ₹101.01 lakh from ₹45.55 lakh. Earnings per share (basic and diluted) stood at ₹0.49, up from ₹0.23 in the corresponding quarter last year.

*EBITDA calculated as Profit Before Tax + Finance Costs + Depreciation + Tax Expense.

Segment-Wise Performance

The Components Division emerged as the primary growth engine, contributing ₹214.91 lakh to segment profit before interest and tax (PBIT), a substantial increase from ₹10.52 lakh in Q1FY25. In contrast, the Machinery Division’s PBIT declined to ₹515.05 lakh from ₹618.64 lakh. Total segment PBIT rose 16.0% to ₹729.96 lakh. Interest expenses increased slightly to ₹464.82 lakh from ₹439.63 lakh, while other unallocable expenses remained stable at ₹123.82 lakh.

Regulatory Update: OFAC Delisting

A critical development for Lokesh Machines is the formal removal of its name from the OFAC Specially Designated Nationals and Blocked Persons (SDN) list. The company had been designated on October 30, 2024, based on allegations regarding exports to Russia. Management contested this, stating it was unaware of any dealings with sanctioned entities.

After submitting comprehensive responses to two questionnaires via US law firm Blank Rome, OFAC’s Reconsideration Team issued a letter dated June 30, 2026, confirming the delisting. The Ministry of External Affairs, Government of India, also confirmed the unblocking of property and interests on July 8, 2026. This resolution restores the company’s ability to conduct foreign currency transactions without restriction.

Capital Raise and Shareholding

During Q1FY26, the company allotted 13 lakh equity shares and 27.78 lakh warrants at a premium of ₹171.71 per share to promoters and non-promoters. On July 11, 2026, 5 lakh warrants were converted into equity shares by non-promoters, increasing paid-up capital to 217.97 lakh shares. As of August 12, 2026, 22.78 lakh warrants remain pending conversion.

What the Numbers Show

The divergence between the Machinery and Components divisions highlights a strategic shift in revenue mix. While the core Machinery Division saw modest PBIT contraction, the Components Division delivered explosive growth, suggesting successful penetration or capacity utilization in high-margin component manufacturing. The restoration of international banking access via OFAC delisting is likely to further support export-oriented operations in future quarters.

Lokesh Machines has secured an order worth ₹58,20,89,421 from the Integrated Headquarters of Ministry of Defence (Army), Government of India, for the supply of MOD kits for 7.62MM Medium Machine Guns. The order, classified as a domestic supply, was awarded by the Master General Sustenance Branch and highlights the company's role in the defence manufacturing sector. The commercial consideration is inclusive of all duties and taxes.

The disclosure confirms that the order does not involve any related party transactions. Additionally, the promoter, promoter group, or group companies do not hold any interest in the entity awarding the order. The information was submitted to the stock exchanges in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Order Details

The key particulars of the order are outlined below:

The filing was made pursuant to a SEBI circular dated July 13, 2023. P. Kodanda Rami Reddy, the Company Secretary & Compliance Officer, signed the disclosure on behalf of Lokesh Machines Limited.