Macpower CNC Machines Ltd

- There is no primary discussion on fundraising for the joint venture (JV) at this stage. - The JV partners have past experience in India and are cautious about sharing technology before building trust. - Funding considerations will be discussed only after technology transfer discussions progress. - Macpower is currently a debt-free company and aims to remain so. - No immediate plans for debt or equity fundraising have been indicated. - Expansion and CapEx plans (₹10-15 crore for capacity addition) are being met internally. - Any future funding related to JV or capacity expansion will depend on JV progress and ministry approvals for new land.

- ₹2 crore CapEx executed in Q1 for production, productivity, backward integration, including machines, crane, fixtures, and tooling. - Additional CapEx of ₹10-15 crore planned in FY '25 and '26 to add 500 machines capacity in existing premises. - New plant and land acquisition underway; awaiting ministry clearance expected before January. - Expansion involves backward integration to improve margins and add higher-value production. - New R&D center started in Bangalore on August 1, targeting advanced machines like 5-axis, EMS, PCB, and semiconductor machining. - Discussions ongoing for JV with German and Japanese players for technology transfer, funding, and global distribution network to support expansion. - Solar power capacity to be increased with an additional 600-kilowatt solar plant for energy cost reduction.

- Macpower expects a 20% to 25% year-on-year growth in revenue and volumes over the next five years. - They plan capacity expansion, targeting an increase from current 2,000 machines to add another 500 machines in FY25-26 with ₹10-15 crore CapEx. - Sales force has expanded by 30-35%, supporting order book growth and improved realization, especially from higher-value machines. - Order book showed a 20-25% quarter-on-quarter increase; new orders continually added. - The average realization per machine is targeted around ₹25 lakhs by FY26, driven by premium products like Double Column, HMC, and 5-axis machines. - Growth is supported by backward integration, new technology, increased distribution network, and R&D initiatives. - The company expects sustained demand with no significant risks impacting growth, including stable political environment and increasing domestic manufacturing focus.

- Macpower expects 20% to 25% year-on-year growth in revenue and capacity over the next five years. - The company is focused on increasing production capacity (currently 2,000 machines with plans to add another 500 in FY25-Q26). - EBITDA margin is expected to improve from the current 17% with potential for an additional 5% to 7% room for margin expansion. - Margin growth is anticipated through backward integration and increased top-line growth. - Expansion in R&D, new technology adoption (e.g., 5-axis machines, EMS, PCB, semiconductor manufacturing) and distribution network will support earnings growth. - Margin improvement opportunities arise from premium product sales and enhanced realization due to backward integration. - Profit after tax (PAT) grew 98% YoY in Q1 FY25, indicating strong earnings momentum. - Continued focus on capacity ramp-up and order book growth to sustain profit and EPS growth.

- As of June 30, 2024, the pending order book stands at ₹283 crore, the highest in Macpower's history. - The company is experiencing a healthy order book, with quarterly additions of 20% to 25% new orders. - Orders are dispatched steadily, with about 4 to 5 machines dispatched daily against new orders. - Execution of the order book is planned over 6 to 9 months, but not all orders are taken onto the shop floor simultaneously; only orders with at least 25% advance payment are executed. - The order book is sustainable and continually growing due to ongoing new orders and a strong sales team. - The management aims to keep increasing the order book quarter-on-quarter, aligned with capacity expansions and production ramp-up plans.