💰 Financial Performance

Revenue Growth by Segment

In FY 2024-25, CNC machines contributed INR 176.46 Cr (68.8% of sales), VMC contributed INR 71.90 Cr (28.0%), VTL contributed INR 4.39 Cr (1.7%), and HMC/DCM contributed INR 3.69 Cr (1.4%). For Q2 FY26, total revenue reached INR 85.71 Cr, a 20.55% YoY increase and a 40.45% sequential growth.

Geographic Revenue Split

The company is 60% to 70% domestic for Horizontal Machining Centers (HMC). While specific regional percentage splits for total revenue are not disclosed, the company is actively expanding into Europe, North America, and Asia to diversify its geographic footprint.

Profitability Margins

Net Profit Margin for FY 2024-25 was 12.00%, up from 11.71% in the previous year. For Q2 FY26, PAT reached INR 9.38 Cr, representing a 12.95% YoY growth and a 105% QoQ increase, driven by higher-end product sales and operating leverage.

EBITDA Margin

EBITDA margin for Q2 FY26 stood at approximately 16.5% (INR 14.16 Cr), reflecting an 11.11% YoY growth and a 78.76% sequential increase. The company is positioned as the lowest-cost producer in the industry, which supports these superior margins.

Capital Expenditure

CapEx for Q2 FY26 was INR 8 Cr, a 100% increase compared to INR 4 Cr in the same quarter of the previous year. This investment is directed toward expanding production capacity and infrastructure to support a target of 7,500 additional units over the next 5 years.

Credit Rating & Borrowing

The company is nearly debt-free with a Debt-to-Equity ratio of 0.02 as of FY 2024-25. Although funds were raised in the form of debt during the year (increasing the Debt Service Coverage Ratio to 385 times from 0), the company remains net debt negative and generates positive free cash flow.

⚙️ Operational Drivers

Raw Materials

Key inputs include foundry components (castings) and high-precision parts. While specific percentage costs per material are not disclosed, the company is pursuing backward integration with an in-house foundry to reduce manufacturing costs and logistics expenses.

Import Sources

Not explicitly disclosed, though the company mentions exploring global joint ventures and strengthening dealer networks in Europe and North America, suggesting a mix of domestic and potentially international sourcing for high-end components.

Capacity Expansion

Current installed capacity was increased to 2,500 machines per annum as of November 10, 2025 (up from 2,000). The company plans to develop an additional 7,500 units over the next 5 years through a new project/plant.

Raw Material Costs

Raw material costs are being optimized through backward integration. In-house manufacturing of components like foundry items is expected to increase EBITDA margins by eliminating third-party supplier margins and reducing rejection rates.

Manufacturing Efficiency

Asset turnover currently stands at ~3x and has the potential to reach 5x at the current plant. Machine average selling price (ASP) increased to INR 20.19 Lakh in Q2 FY26 from INR 18.48 Lakh YoY due to a shift toward higher-end products.

Logistics & Distribution

The company aims to reduce logistic costs through backward integration and in-house manufacturing, which will also save assembly time and improve sustainable margin growth.

📈 Strategic Growth

Expected Growth Rate

25-30%

Growth Strategy

Growth will be achieved by expanding capacity to 2,500 units, executing a pending order book of INR 350 Cr, and targeting a domestic tender pipeline of INR 627 Cr. Strategic focus includes backward integration (foundry), entering newer industry segments like aerospace and defense, and exploring joint ventures for high-end technology.

Products & Services

CNC Lathe machines, Vertical Machining Centers (VMC), Horizontal Machining Centers (HMC), Vertical Turret Lathes (VTL), Drill Tap Centers (DTC), and 5-Axis/Turn-Mill machines.

Brand Portfolio

MACPOWER

New Products/Services

Launched 37 new models in FY25 alone, including high-end VMCs, HMCs, and 5-Axis machines. These higher-complexity units have increased the Average Selling Price to over INR 20 Lakh per machine.

Market Expansion

Targeting expansion in Europe, North America, and Asia. The company is also focusing on Tier 2 and Tier 3 suppliers for the aeronautic industry and plans to open a new tech center in Pune.

Market Share & Ranking

Positioned as a technology-led capital goods platform with the widest range of offerings (375+ models) among peers.

Strategic Alliances

Exploring joint ventures for high-end technology and has previously entered into an MOU with the Gujarat government for expansion.

🌍 External Factors

Industry Trends

The industry is shifting toward high-precision, technology-driven CNC machinery. Macpower is positioning itself to capitalize on the growing domestic demand in defense, aerospace, and the 'Make in India' initiative, evolving from a basic tool maker to a technology platform.

Competitive Landscape

Competes with other CNC and machine tool manufacturers; maintains an edge through cost leadership and a superior range of high-end models like 5-axis and Turn-Mill machines.

Competitive Moat

Sustainable competitive advantages include being the lowest-cost producer, having the widest product range (375+ variants), and high asset turnover (3x-5x). These moats are reinforced by a high promoter holding of 73.17% and a debt-free balance sheet.

Macro Economic Sensitivity

Highly sensitive to the Indian industrial capex cycle and global GDP growth, which is projected at 3.3% for 2025 and 2026.

Consumer Behavior

Industrial customers are increasingly demanding higher precision and IoT-integrated machines, prompting Macpower to incorporate feasible IoT features into its product portfolio.

Geopolitical Risks

Expansion into international markets like Europe and North America introduces exposure to trade barriers and global geopolitical stability.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to manufacturing standards and industrial safety norms. The company complies with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for corporate governance.

Environmental Compliance

The company highlights ESG efforts in its investor presentations, though specific compliance costs are not disclosed.

Taxation Policy Impact

Not explicitly detailed, though PBT to PAT conversion for FY25 suggests an effective tax rate of approximately 26.5%.

⚠️ Risk Analysis

Key Uncertainties

Potential delays in the commencement of the new 7,500-unit project and fluctuations in raw material costs could impact the projected 25-30% growth rate.

Geographic Concentration Risk

Significant concentration in the Indian domestic market, particularly for HMC products (60-70% domestic).

Third Party Dependencies

Currently dependent on external suppliers for foundry and components, which is being addressed through backward integration to mitigate supply chain disruptions.

Technology Obsolescence Risk

Risk of rapid technological shifts in CNC machining; mitigated by continuous R&D and the launch of 37 new models in the last fiscal year.

Credit & Counterparty Risk

The company maintains a strong balance sheet with positive free cash flow since FY 2017-18, indicating high-quality receivables and working capital efficiency.