Detailed Narrative
Q1 FY26 Performance Highlights
Macpower CNC reported its highest-ever Q1 performance, with revenue reaching ₹61.03 crores, a 21.53% YoY increase. EBITDA also hit a Q1 record of ₹7.92 crores, growing 20.53% YoY. PAT stood at ₹4.56 crores, up 13.42% YoY. The gross margin for the quarter was 38.5%, an improvement from 37.3% in Q1 FY25 and slightly higher than Q4 FY25's 38.3%.
Order Book and Growth Strategy
The company's pending order book reached an all-time high of ₹346 crores as of June 30, 2025, reflecting a 22% YoY growth from ₹283 crores in Q1 last year. New order inflow for Q1 FY26 was ₹75 crores (₹74 crores from private and ₹1 crore from government orders). Management aims for a minimum 20% quarter-on-quarter order book growth and targets FY26 revenue between ₹300-350 crores. The total bid submitted, including domestic and tender business, stands at ₹1,102 crores.
Capacity Expansion and Land Acquisition
Macpower is set to increase its short-term capacity to 2,500 machines by the first week of September 2025 by adding 500 machines. For long-term expansion, the company has secured a larger land parcel of over 50 acres, replacing the previously planned 30 acres, with support from the government. This new land will allow for a maximum capacity of over 10,000 machines. The company expects to announce new facility construction and backward integration plans by December 2025, with operations starting within one year of land acquisition and funding.
Funding and Working Capital Management
For its expansion projects, Macpower indicated a preference for debt funding, citing a 50% interest cost reimbursement scheme from the government. The company currently has a working cash credit (CC) facility and bank guarantee/LC limits of ₹30 crores, which are largely unutilized, maintaining a debt-free status. However, due to longer payment cycles for government orders (5-6 months), working capital days are expected to increase from the current 125 days to 130-135 days.
Defence and Aerospace Sector Focus
The defence sector currently contributes 6-7% of the company's order book. Macpower is actively participating in naval warship projects, having executed one for Mazagaon dockyard and bidding for Cochin shipping yard. The company is also focusing on the aerospace sector, with a potential order for 260 machines from a major Indian aerospace manufacturer. Management expects defence business to almost double this financial year.
Market Share and Product Basket Expansion
Macpower currently holds a 4% market share in India's production and 2% in consumption. The company is aggressively working to increase its market share by expanding its distribution network to 39 cities, doubling its sales and service force to 234 people, and continuously adding new products to its basket. The focus is on higher-end products, including NEXA machines, which contributed 27% to Q1 sales, and double-column machining centers, with more than double-digit sales expected this year.