Macpower CNC Machines Ltd Q4 FY25 Earnings Analysis

- Capacity to produce 2,500 machines will be operational from May 2025, up from 2,000 machines, increasing revenue capacity from INR 400 crores to around INR 425-450 crores. - Average realization per machine expected to rise to INR 23-25 lakhs in FY26 due to higher-end machines like double column, HMC, VTL, and 5-axis. - Sales growth expected to be 20-25% CAGR next financial year, driven by increased capacity, higher realization, and targeting big corporates and exports. - Margins expected to improve due to backward integration and focus on higher value products. - Continued bullishness and aggressive market approach as company holds only about 4% market share, leaving room for growth. - Capex phased with INR 100 crores in first phase and another INR 100 crores in second phase for expansion starting 2028 on new land. - Export and aerospace sectors targeted for higher growth alongside domestic manufacturing demand.

- PAT margin expected to remain at double digits in the next financial year, despite rising depreciation and expenses. - EBITDA margin projected around 20%, supported by reduced material consumption (4%-5%) due to higher-end products and backward integration. - Top-line growth anticipated at 20%-25% next year, driven by higher realization from bigger corporates and increased order bookings after targeting multinationals. - Capacity expansion to 2,500 machines by May FY26 expected to support growth, with further phase-wise Capex of INR 100 crores each planned from FY28 onwards to scale capacity beyond 2,500. - EPS growth expected to be strong, fueled by revenue growth, EBITDA margin expansion, and controlled operating costs despite new exhibition-related expenses. - Focus on sectors like aerospace and exports aims to diversify revenue and sustain growth momentum.

- Macpower CNC Machines plans phased capital expenditure on its 32-acre land expansion: - Phase 1: INR 100 crores - Phase 2: Another INR 100 crores (land cost approx. INR 120 crores, so separate) - Routine annual Capex guidance: - FY25 (9 months): INR ~7.8 crores spent, total expected INR 10-12 crores - FY26: Target INR 12-15 crores for backward integration and production capacity expansion - Capacity expansion: - Adding 500 machines from May, increasing machine capacity from 2,000 to 2,500 - Future capacity plans consider 2,000 additional machines post land acquisition, but phased to control operating costs and ROI - Capex financed through internal accruals and working capital utilization; minimal need for large debt - New infrastructure needed for backward integration (foundry, component machining, assembly shops) and product diversification including higher-end machines

- No large amount of debt is expected despite ongoing Capex, as growth will be funded largely through profits. - Temporary fund utilization from working capital, such as credit on materials, may be used, but not substantial debt. - Interest cost increase (INR 0.28 crore) is due to short-term working capital utilization and bank processing charges rather than new significant debt. - Capex guidance is INR 10-15 crores annually for routine expansion and backward integration; major Capex is considered separately. - No explicit mention of equity fundraising or large-scale debt in the call. - Management intends to fund growth and expansions primarily through internal accruals and controlled working capital usage.

- Current order book is around INR 362 crores (Page 11, 4). - Ready-to-use machines worth approximately INR 125 crores including production and inventory (Page 11). - Capacity increased from 2,000 to 2,500 machines expected next year (Page 4). - New orders, including IMTEX exhibition orders (INR ~42 crore) are expected to add to the order book (Page 14, 19, 23). - Order book expected to be substantial in Q4 and likely to increase with new orders and rollovers (Page 19, 23). - Orders worth INR 115-120 crores planned for dispatch in Feb-Mar (Page 19). - Around 10-15% of customers place bookings and bill within the same month (Page 21). - Payment delays from banks/PSUs can impact timely billing and realization but overall positive outlook on highest-ever top line (Page 11, 19, 20). - The company targets INR 500 crore order book in the new financial year including rollovers (Page 23).