Macpower CNC Machines Limited — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Macpower CNC reported an all-time high in Q2 FY26 revenue, EBITDA, and PAT, driven by strong quarter-on-quarter growth. The company expanded its production capacity to 2,500 machines and has a robust pending order book of ₹350 crores. Strategic initiatives include new product development, international market expansion through the EMO exhibition, and advanced discussions for technology transfer and collaborations, despite a slight dip in order inflow and potential increase in receivable days.

Highlights

  • Revenue of ₹85.71 crores, up 40.45% QoQ and 20.55% YoY, achieving an all-time high.

  • EBITDA of ₹14.16 crores, up 78.76% QoQ and 11.11% YoY, also an all-time high.

  • PAT of ₹9.38 crores, up 105% QoQ and 12.95% YoY, an all-time high.

  • Production capacity expanded to 2,500 machines from 2,000, effective November 10, 2025.

  • Pending order book stands at ₹350 crores, with total bids submitted at ₹987 crores.

  • Successfully showcased and sold machines at the EMO Germany exhibition, expanding global presence and discussing with foreign dealers.

  • Engaged in technology transfer and collaboration discussions with double-digit companies, shortlisted five, and signed NDAs with three.

Concerns

  • Order inflow for Q2 FY26 decreased 5% YoY to ₹88 crores compared to ₹93 crores in Q2 FY25.

  • Receivable days may increase due to focus on larger clients and the defence sector, which typically have 90-day payment terms.

  • Exhibition expenses for EMO Germany amounted to ₹1.5-2 crores, impacting Q2 financials.

Key financials

  1. Revenue ₹85.71 Cr +20.5%YoY
  2. EBITDA ₹14.16 Cr +11.1%YoY
  3. PAT ₹9.38 Cr +13%YoY
  4. Machine Average Price ₹20.19 lakh
  5. Depreciation Increase ₹32 lakh

What they filed

Q1 FY27: revenue up 56.1%, net profit up 110.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue71 60 80 61 86 +21%86 +43%100 +25%95 +56%
EBITDA13 8 14 8 14 +11%16 +99%16 +14%15 +95%
Net profit8 4 9 5 9 +13%10 +119%10 +18%10 +110%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹350 Cr

as of 2025-11-14 quantified

Inflow this quarter

₹88 Cr

Composition

  • Nexa order book executed (other) 27%

Pipeline

L1 awaiting loa

Domestic bids submitted and tender bids under evaluation

Management noted that billing for some orders is jumping to the next month due to customers utilizing PSU/bank loans with subsidies, which affects execution timelines rather than order cancellations.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹8 Cr this quarter · ₹125 Cr (Phase 1) planned Debt from SIDBI or bank, potentially stake for foreign collaboration partner
    • Capacity expansion for new plant including land ₹125 Cr
    • Backward integration for components like foundries
    this quarter we added INR8 crore in this quarter for the CapEx. Therefore, depreciation is also increased by INR32 lakh on y-o-y due to CapEx. ... So first phase, we will complete our first phase from the debt, or maybe our foreign collaboration company required some stake, we will give it to them as a strategical partner. But right now, we are thinking and creating the project report for the SIDBI or our bank. ... Phase one, we are expecting INR125 crore including land.
  • Debt Debt disclosed
    your company is debt-free company. And we rarely use our working capital... So for fundraise also, we are not thinking for the new plant also. In phase one, we will get the debt, because right now we have zero debt.
  • M&A Undisclosed foreign companies Joint venture · Announced

    Technology transfer and collaboration for new product lines and import substitution

    Aims to add separate production lines for foreign partners' products and manufacture products not currently produced in India.

    Meeting with some foreign players during the Germany exhibition for the technology transfer and collaboration. I would like to announce you that we already meet and do the MOU meeting with more than double digit companies from the various part of the world like Europe, Japan, Korea and Taiwan. So, in double digit for technology transfer and collaboration. From this, we selected five companies offering diverse product portfolio in sectors such as medical, semiconductor, EMS, die and mould and electronic parts manufacturing. Out of these five, we already signed the NDA with the three companies and the two companies from this -- out of five, two company's delegation is already visited Macpower.
  • Liquidity Undrawn ₹30 Cr The company has a ₹30 crore cash credit facility, primarily used for bank guarantees and LCs for import components, and is not fully utilized.
    For the working capital, we have a INR30 crores cash credit. We are not utilizing that credit only for the bank guarantee and LC for the import component. So because it's 90 days, 120 days credit, so that's why utilizing the bank guarantee and this LC. We have a INR30 crore CC facility available with us. Maybe we'll use this CC facility if we require the cash flow.

Guidance & targets

Revenue

  • Year-on-year growth Revenue · FY26 and next financial year · High confidence 25-30%
    So, same thing as last year, we had already discussed that 20% to 30% growth in year-on-year. So, same growth we are expecting maybe 25%, maybe 30% in this financial year. And same planning we are doing for the next financial year for 25% to 30% growth.

    — Rupesh Mehta, Chairman & Managing Director

  • Revenue potential from new plant (2,500 machines) Revenue · FY27 · High confidence ₹500 crores
    So, in FY27, we expect that optimum we can use this entire 2,500? Yeah, 2500. And the top line may be 500 crores we can utilize. That will be the revenue potential. Yeah, revenue potential.

    — Rupesh Mehta, Chairman & Managing Director

Profitability

  • EBITDA Profitability · FY26 · High confidence ₹50 crores
    So this time I think we are expecting INR50 crore EBITDA and we'll achieve this. There is no any doubt about it. ... But my target is to close between 300 to 330 and definitely achieve INR50 crore EBITDA.

    — Rupesh Mehta, Chairman & Managing Director

Capacity

  • Machine capacity Capacity · coming five years · Medium confidence 10,000 machines
    So totally, we are planning a 10,000 machines capacity we are planning in coming five years.

    — Rupesh Mehta, Chairman & Managing Director

Order Book

  • Order book closing Order Book · year end · High confidence ₹300-330 crores
    But my target is to close between 300 to 330 and definitely achieve INR50 crore EBITDA. This is more our executions plan rather than order book.

    — Rupesh Mehta, Chairman & Managing Director

Margin

  • Margin trend Margin · this year, quarter-on-quarter · Medium confidence slightly increased
    Margin may be slightly increased because there is no big exhibitions and the revenue may will try to keep the remaining minimum same and there is no other expense in this quarter. So this year, margin will be also increased in a quarter-on-quarter.

    — Rupesh Mehta, Chairman & Managing Director

What to watch in Q3 FY26

Land allotment for new plant

December 2025 / January 2026
Current Token money paid, MOU in place
Target Land allotment received

Why it matters

Land acquisition is a prerequisite for the new plant construction and capacity expansion, crucial for future growth.

I informed in my quarter one concall we expected acquire the land by end of December. Now, major approval from the all relevant department have been obtained. So same thing is here in December end, maybe we will receive this land.

Risks & concerns

  • Increased receivable days from larger clients and defence sector

    medium

    Focusing on defence sector and larger clients may lead to 90-day payment terms, increasing receivable days, though management is not worried due to available credit facilities.

    Analyst acknowledged

  • Challenges in collecting payments from Tier 3/4 customers and direct credit risk

    medium

    Management highlighted difficulties in collecting payments from Tier 3/4 clients and avoids direct credit to customers, preferring financial partners to mitigate bad debt risk.

    Management acknowledged

  • Execution delays due to customer payment/loan processes

    medium

    Customer reliance on PSU/bank loans with subsidies can cause billing to be pushed to subsequent months, impacting execution and revenue recognition timelines.

    Management acknowledged

  • Talent, skill, and retention challenges for new technologies

    medium

    Management identified talent, skill, and retention as a significant challenge, especially for new technology, automation, and IOT 4.0 initiatives.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Client acquisition and sales strategy for expanded capacity Direct
First of all, selling strategy and selling techniques should not be discussed in public platform, and we are focusing as in my last concalls, you, I think attend all the concalls. First of all, we don't have capacity. So, we are focusing on tier 3 and tier 4. And our market share is just 4.5% right now. Previously, it was just 4%. So we are not focusing the segment we are focusing on the area and client right now.

Analyst questioned the strategy to sell a significantly expanded capacity, especially to larger clients, and management clarified their current focus on Tier 3/4 clients and gradual shift to Tier 2 with new capacity.

Asked by Dhaval Shah

Impact of increased capacity on receivable days Partial
I think once you focus on the defence sector, their payment terms is – margin is good, but the payment terms is almost 90 days. So, it may increase but I'm not worried about that. Because right now we have a surplus, I think if you can see we are not utilizing our cash credit also.

Analyst raised concern about potential increase in receivable days with larger clients. Management acknowledged the longer payment terms for sectors like defence but expressed confidence in their liquidity and credit facilities.

Asked by Dhaval Shah

Reasons for YoY decrease in order inflow for Q2 FY26 Evasive
Maybe we executed some more compared to last quarter, if you can see our execution. So this time, our execution is more than last quarter. ... Maybe sometimes it's because of holiday, it may be forwarded to if you can go through the six months versus six months then it's increased by... So I think because of this, I have to check this. I will come back to you after checking the data, Runitji.

Analyst pointed out a 5% YoY decline in order inflow, which management could not immediately explain, promising to check the data, indicating a potential area of concern or lack of immediate insight.

Asked by Runit Kapoor

Strategy for growth and engaging Tier 1/2 clients given market demand Direct
These are the biggest headaches to collect the payment from the tier three and tier four. And sometimes without margin, if you are just throwing the production that is also a not good strategy according to my experience that if you are not earning a good margin, then why to supply the machine to just trade the top line. I'm focusing always on the bottom line and the credit system we are giving right now, but not directly through some partners, just like some financial company, they are giving the loans to the customer and they will pay us after three months or two months.

Analyst questioned why the company isn't more aggressive in pursuing Tier 1/2 clients despite high demand. Management emphasized profitability and a cautious approach to credit, preferring financial partners for customer loans to avoid bad debts.

Asked by Runit Kapoor

Timelines for JV finalization and revenue generation from new capacity Direct
We don't have that much hurry to complete this agreement. ... From the new plant production, I think if we can start worst come worst from the next financial year in April or May, we can start the construction, it will take one year to complete the project. So, after 15 to 16 months, we can start generating the revenue and adding the capacity.

Analyst sought clarity on the timeline for JV and new plant revenue. Management indicated a measured approach to JV finalization and projected revenue generation from the new plant within 15-16 months after construction starts next financial year.

Asked by Khush Nahar

Funding strategy for the ₹125 crore CapEx for the new plant Direct
For new planning, Kamalji, it is INR125 crore and we are going to get the debt from the SIDBI or our bank and in phase one maybe we completed our strategic partner from foreign global partner. So maybe we can give some stake as a technology partner as a strategic partner. But right now we are not planning to raise the fund in phase one for the new expansion.

Analyst inquired about the funding mix for the significant CapEx. Management confirmed plans to use debt from SIDBI/banks and potentially offer a stake to a foreign technology partner, ruling out immediate equity raise for phase one.

Asked by Prateek Kothari

Update on the MOU with Gujarat government for defence and aerospace manufacturing Direct
I already, I think, informed in my speech and in some of the questions that we already paid the token charges and now we with this MOU only, they are offering. And in December end, I think we'll get the allotment. Maybe it can extend to January. They have 14 January, 15 January, they have vibrant Gujarat in Gandhi Nagar. So maybe they invite us in Gandhi Nagar to hand over this document but I'm expecting in December, maybe they can hand over in front of the thousands of people in the vibrant Gujarat show.

Analyst sought an update on the Gujarat government MOU. Management confirmed token payment, expected land allotment by December/January, and potential formal handover at the Vibrant Gujarat show, indicating progress on this strategic initiative.

Asked by Sarosh Sethna

2 min read 6 chapters

Detailed narrative

Q2 FY26 Financial Performance Highlights

Macpower CNC reported its highest-ever quarterly performance in Q2 FY26. Revenue reached ₹85.71 crores, demonstrating a robust 40.45% quarter-on-quarter and 20.55% year-on-year growth. EBITDA also saw significant improvement, standing at ₹14.16 crores, up 78.76% QoQ and 11.11% YoY. Net Profit After Tax (PAT) surged by 105% QoQ and 12.95% YoY to ₹9.38 crores, reflecting strong operational efficiency and demand.

Capacity Expansion and Product Development

The company increased its production capacity from 2,000 to 2,500 machines annually, effective November 10, 2025. This expansion is supported by an ₹8 crore CapEx investment in Q2 FY26, leading to a ₹32 lakh YoY increase in depreciation. Macpower also introduced several new machines, including the TOM Turning Cum Milling machine with Y-axis, MONO 400 XL, GX 100 Super, 1066 APC automatic pallet changer, and a new 5-axis machine design, catering to higher-end product segments and increasing the average machine price to ₹20.19 lakh from ₹18.48 lakh YoY.

Strategic Collaborations and International Market Expansion

Macpower actively pursued international growth, participating in the EMO Germany exhibition where it successfully showcased and sold machines, securing new foreign dealer orders. The company engaged in over a dozen MOU meetings for technology transfer and collaboration with European, Japanese, Korean, and Taiwanese firms. Five companies were shortlisted, and NDAs were signed with three, with two delegations already visiting Macpower, aiming to introduce import-substitute products and expand exports.

Future Growth Plans and Land Acquisition

The company is planning a total capacity of 10,000 machines over the next five years. Token money has been paid for land acquisition, with allotment expected by December 2025 or January 2026, potentially at the Vibrant Gujarat show. Phase one of the new plant, estimated at ₹125 crores including land, will add another 2,500 machines and incorporate backward integration for components like foundries. Construction is projected to start in April/May of the next financial year, with revenue generation commencing 15-16 months thereafter, targeting ₹500 crores from this new capacity.

Order Book and Market Strategy

Macpower maintains a healthy pending order book of ₹350 crores. Total bids submitted amount to ₹987 crores, with ₹627 crores in domestic bids and ₹360 crores under evaluation. While Q2 FY26 order inflow was ₹88 crores, a 5% YoY decrease from ₹93 crores in Q2 FY25, management attributes this to execution pace and potential holiday impacts. The company primarily targets Tier 3 and Tier 4 clients but is gradually expanding to Tier 2, with a current market share of 4.5%.

Capital Allocation and Funding

The company remains debt-free and plans to fund the ₹125 crore CapEx for the new plant through debt from SIDBI or other banks, potentially offering a stake to a foreign collaboration partner. Macpower has a ₹30 crore cash credit facility, which is currently underutilized, primarily for bank guarantees and LCs for import components. Management is confident in its ability to manage working capital, even with potentially longer receivable cycles from larger clients in sectors like defence.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Capital Goods earnings calls