Macpower CNC Machines Limited — Q3 FY26 earnings call

Call held 11 Feb 2026

Management summary

Macpower CNC delivered its highest ever quarterly performance in Q3 FY26, with robust growth across revenue, EBITDA, and PAT, driven by strong demand and a focus on higher-end Nexa products. The company is actively addressing capacity constraints through temporary rental spaces and is awaiting new land allocation to support its ambitious growth and margin expansion targets. Discussions for technology transfer and export market penetration are also progressing.

Highlights

  • Revenue of INR86.15 crores, up 43% YoY.

  • EBITDA of INR15.58 crores, up 99% YoY, with EBITDA margin at 18.08%.

  • PAT of INR9.79 crores, up 119% YoY, with PAT margin at 11.37%.

  • Pending order book increased to INR375 crores, showing 17% growth.

  • Nexa product contribution to order book reached 39%, indicating focus on higher-end products.

Concerns

  • Current plant capacity constraints are limiting aggressive growth and market share capture, with market share currently at 4.5% in value.

  • Delay in new land acquisition due to waiting for new government policy, impacting long-term capacity expansion plans.

Key financials

2 periods

Headline

  • Revenue
    ₹86.15 Cr
    YoY +43%
  • EBITDA
    ₹15.58 Cr
    YoY +99%
  • EBITDA Margin
    18.1%
  • PAT
    ₹9.79 Cr
    YoY +119%
  • PAT Margin
    11.4%

9M

  • CapEx
    ₹12.41 Cr

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

₹375 Cr

as of 2025-12-31 quantified

17% YoY

Composition

  • Nexa products (product) 39%

Pipeline

L1 awaiting loa

Total bidding pipeline including domestic and tender bids

Management expects more strong order book and more delivery in Q4 FY26.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed short-term loan and reserve fund in bank
    • Capacity enhancement and new plant infrastructure
    This new land for rental we are just discussing because it is readily available with the very nominal rental base. So in '26-'27 financial year, if we receive the land on March, then also minimum 12 months, one year we have to wait for the infrastructure, plant and machinery and expansion of the capacity. ... we'll borrow some short-term loan, and right now we have some of the reserve fund in our bank also. So this is a temporary short fund we'll utilize.
  • M&A Foreign technology partner Joint venture · Pending regulatory

    Technology transfer for product manufacturing in India, especially for import substitute products.

    Foreign partners are not investing, it's a technology transfer and buyback system with royalty.

    So it is already in our agenda in Q2 concall meeting we had discussed about the joint venture or the technology transfer and some of the product we will produce in India with their technology. We already met 5 companies in last Germany exhibitions and we are almost in the finalization stage. But we are waiting for the new land. Once we receive the new land, I think we will start with one company. ... It's not like a joint venture. It is a word I am using but it is like a technology transfer and buyback systems. So they are not investing. They want to invest but I denied them for the investment. So it is a one kind of the business opportunity that we produce some of the machine for Asian market in our new plant and some of the imposed substitute product they will guide us to produce in our new plant and we'll give some kind of percentage royalty to them.
  • Liquidity Liquidity disclosed Company has reserve funds in the bank and plans to utilize short-term loans for new plant funding.
    Right now, what the percentage they are asking is too high. We are discussing. So maximum for 5% we offer them. But after that if we not agreed that will not give more than 5%. But about the new plant fund we'll borrow some short-term loan, and right now we have some of the reserve fund in our bank also. So this is a temporary short fund we'll utilize.

Guidance & targets

Revenue

  • Annual Revenue Growth Revenue · every year · High confidence 25% to 30%
    I think as I discussed Arnavji that every year we will achieve 25% to 30% growth. So same journey we are expecting for next financial year also.

    — Rupesh Mehta

  • Revenue Growth Revenue · FY29 · High confidence 25%
    No. It is after completion of new plant and fully operated. So I think '29 we can achieve 25%.

    — Rupesh Mehta

Profitability

  • EBITDA Margin Profitability · in coming 2, 3 years in new plant · High confidence 25%
    So that's why I believe that we can achieve this 25% in coming 2, 3 years in new plant. ... I had given the clear projection that we are trying to achieve the 25% EBITDA with the new plant capacity and new investment in new backward integration. So we are expecting maximum 25%.

    — Rupesh Mehta

Capacity

  • Capacity Utilization Capacity · entire year · High confidence 85%
    So almost 85% we are expecting capacity utilization.

    — Rupesh Mehta

Order Book

  • New Order Growth Order Book · each and every quarter-on-quarter · High confidence minimum 25%
    I think as I discussed in my previous concall also that we will try to get the minimum 25%, new orders against executed and the new order. So we will increase 25% order book on each and every quarter-on-quarter.

    — Rupesh Mehta

Exports

  • Average Realization Increase from Exports Exports · next financial year · Medium confidence 10% to 20%
    But right now average realization as expecting in next financial year that will increase by 10% to 20% in focusing on more high valued machines.

    — Rupesh Mehta

R&D

  • R&D Budget as % of Revenue R&D · every year · High confidence 1% to 2%
    No, I think we decided at least 1% or 2%, minimum 1%, maximum 2% is the R&D budget

    — Rupesh Mehta

What to watch in Q4 FY26

New land acquisition status

March first week, second week
Current Waiting for new government policy (Gujarat budget or February end)
Target Agreement signed and land received for new project

Why it matters

Crucial for long-term capacity expansion and achieving growth targets.

Update about our new land, we have already paid a primary token advance amount and all the government said, almost 18 type of the different approvals we received and now everything is clear. We have to just sign the agreement with the government but we are waiting for the government new policy which is maybe in this Gujarat budget or maybe in February end. So maybe I hopefully expect that in March first week, second week we receive our new land for the new project.

Risks & concerns

  • Current plant capacity constraints

    medium

    Current capacity is limiting aggressive growth and market share capture, with market share at 4.5% in value. Temporary rental space is being used to mitigate this.

    Management acknowledged

  • Delay in new land acquisition

    medium

    Waiting for new government policy (Gujarat budget or February end) to sign agreement for new land, impacting long-term capacity expansion timeline.

    Management acknowledged

  • Competition from low-quality Chinese imports

    low

    Chinese machines are low quality with short lifespan (1-2 years) and upcoming BIS standards (September-October deadline) are expected to stop such imports.

    Analyst downplayed

Q&A highlights

7 direct
Purpose of new rental land for capacity expansion Direct
This new land for rental we are just discussing because it is readily available with the very nominal rental base. So in '26-'27 financial year, if we receive the land on March, then also minimum 12 months, one year we have to wait for the infrastructure, plant and machinery and expansion of the capacity. So meanwhile for '26-'27, this land is available for a short period. So we are deciding that if we utilize this land, then we can smoothen our production and production capacity also we can, I think, improve.

Clarifies that the rental land is a temporary measure to smooth production and improve capacity in the short term while waiting for the new permanent plant.

Asked by Arnav Sakhuja

Resolution of bank realization issues Direct
No, I think now we have some kind of the financial scheme also available with some of the NBFC and that is why our payment and financial realisation issue is almost sold out. So that's why we make one good strategy also with some NBFC and now we don't have that much problem for the realisation.

Indicates that a previous concern regarding bank realization issues has been addressed through strategic partnerships with NBFCs, improving cash flow.

Asked by Arnav Sakhuja

Timeline for 25% EBITDA margin guidance Direct
After I think fully operation of new plant we can achieve 25%.

Provides a clear condition and timeline for achieving the ambitious 25% EBITDA margin target, linking it to the new plant's full operation.

Asked by Hitesh Jain

Competitive intensity in government/tender biddings Direct
I think average everybody is getting 10% to 12%. Some of the small machines or basic machines tender we are not filing because the process and the bank guarantee amount is hold and some of the institute are not that much good for the payment systems. So and some of the company is not filing the higher end machines like INR5 crores, INR10 crores, INR20 crores. So, it is company to company they are selecting the technicals and then they are filing. So average in terms of the value, in terms of the numbers they are getting 10% to 12%.

Offers insight into the competitive landscape for government tenders, indicating a 10-12% average win rate and strategic selectivity in bidding for higher-value machines.

Asked by Shashi Kant

Impact of Chinese imports and BIS standards Direct
But these Chinese machines is only one year. So I don't think so it will affect our Indian market. But I think new rules of BRTS is I think applicable on next financial year. September-October is the deadline. So maybe after that almost this kind of import from other country and from China will stop.

Addresses concerns about competition from Chinese imports, highlighting their quality issues and the upcoming regulatory changes (BIS standards) that are expected to curb such imports, benefiting domestic players.

Asked by Ronit Kapoor

Funding for new plant CapEx without foreign partner investment Direct
Right now, what the percentage they are asking is too high. We are discussing. So maximum for 5% we offer them. But after that if we not agreed that will not give more than 5%. But about the new plant fund we'll borrow some short-term loan, and right now we have some of the reserve fund in our bank also. So this is a temporary short fund we'll utilize.

Clarifies the funding strategy for the new plant, indicating reliance on short-term loans and internal reserves, and a cautious approach to foreign partner equity participation.

Asked by Mahek Talati

Quality comparison with Indian and international CNC machine manufacturers Direct
I think we all are neck to neck, because we have to follow the Indian IS standards. Everybody is following the IS standard. Everybody have a laser, ball bar, NAS test which are the international norms which we have to follow to deliver the machines. So I think all the top five players are following these standards and I think we all are capable to follow the standard and equal to other top five player Macpower is also in same cube. There is no one, two, three, four because everybody has to follow the same standard of quality. ... I think, our machine Indian machines is capable to compete them but what we are manufacturing right now, we are neck to neck. That German and Italian what they are manufacturing we don't have that product in India.

Provides a detailed assessment of Macpower's quality relative to competitors, asserting parity with top Indian players due to adherence to international standards, and highlighting focus on products not manufactured by German/Italian counterparts in India.

Asked by Zubin C.

3 min read 6 chapters

Detailed narrative

Strong Q3 FY26 Financial Performance

Macpower CNC reported its highest ever quarterly performance in Q3 FY26. Revenue surged by 43% year-on-year to INR86.15 crores. EBITDA saw a significant increase of 99% year-on-year, reaching INR15.58 crores, with the EBITDA margin expanding to 18.08%. Net profit (PAT) also grew robustly by 119% year-on-year to INR9.79 crores, achieving a PAT margin of 11.37%. The average machine price increased from INR18.28 lakh in the previous year's Q3 to nearly INR20 lakh in Q3 FY26.

Robust Order Book and Pipeline

The company's pending order book grew by 17% to INR375 crores, indicating strong future revenue visibility. Additionally, Macpower has submitted domestic bids worth INR639 crores and tender bids for defence and aeronautic sectors totaling INR319 crores, bringing the total bidding pipeline to INR958 crores. The Nexa product line, which focuses on higher-end machines, now contributes 39% to the order book, reflecting a successful shift in product mix. Management expects a minimum of 25% new order growth quarter-on-quarter against executed orders.

Capacity Expansion and Land Acquisition Strategy

To address current capacity constraints, Macpower has taken a 10,000 square feet industrial space on rental and is discussing an additional 50,000 to 1 lakh square feet. This temporary measure aims to smoothen production and improve capacity for FY27. For long-term expansion, the company has paid an advance for new land and received most approvals, but is awaiting a new government policy, expected by March first or second week, to finalize the agreement. The new plant is crucial for achieving the targeted 2,500 machines capacity.

Strategic Focus on Margins and New Products

Macpower aims to achieve a 25% EBITDA margin within 2-3 years, driven by backward integration, focus on premium Nexa products, and increased defense business, which offers higher margins. The company launched three new products in Q3 FY26: DCM 4222 (double column series, ~INR2 crores value), Turn-Mill Center with Y-axis (~INR1 crore value), and GX 100 Super. R&D budget is maintained at 1-2% of revenue, and the R&D team has doubled in size compared to last year, ensuring a pipeline of new products.

Export Market Penetration and Technology Transfer

The company is gradually increasing its presence in the export market, particularly in Europe, following participation in the EMO Exhibition in Germany. Export margins are 5-7% better due to incentives and pricing. Macpower is also in the final stages of discussions for joint ventures or technology transfer agreements with 5 foreign companies, aiming to produce advanced machines in India. This initiative is contingent on receiving the new land and is structured as a technology transfer and buyback system with royalty, rather than foreign equity investment.

Mitigation of Competition and Financial Realization

Management downplayed the threat from low-quality Chinese imports, citing their short lifespan and the upcoming BIS standards (expected by September-October) which will curb such imports. Bank realization issues, a past concern, have been resolved through strategic financial schemes with NBFCs, ensuring timely payments. The cost of FANUC controllers, a key component, has been beneficial due to a decrease in the Japanese Yen over the last two quarters.

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