Macpower CNC Machines Limited — Q4 FY25 earnings call

Call held 2 Jun 2025

Management summary

Macpower CNC reported its highest ever quarterly and annual revenues and EBITDA for Q4 and FY25, driven by a robust order book of INR 331 crore and significant bidding activity. The company is aggressively expanding capacity to 2,500 machines by July 2025 and focusing on high-value defence and aerospace segments. While adjusted PAT showed strong growth, reported PAT saw a slight YoY decline in Q4, and management acknowledged challenges with lengthy land acquisition processes and customer payment cycles.

Highlights

  • Q4 FY25 Revenue of INR 80.01 crore, highest ever for any quarter, up 12% YoY and 33% QoQ.

  • FY25 Revenue of INR 261.82 crore, highest ever, up 9% YoY.

  • Q4 FY25 EBITDA of INR 14.30 crore with 17.87% margin, up 11% YoY and 83% QoQ.

  • FY25 EBITDA of INR 41.54 crore with 15.87% margin, up 17% YoY.

  • Highest ever pending order book of INR 331 crore as of March 31, 2025, including INR 23 crore from defence.

  • Highest ever total bid submitted of INR 1,076 crore, with INR 570 crore in defence.

  • Capacity expansion to 2,500 machines by July 1, 2025.

  • 90% reduction in daytime power bill due to solar captive consumption.

  • Developed 37 new product variants, including Drill Tap Center and 1.5 meter turn-mill center for defence.

Concerns

  • Q4 FY25 Reported PAT declined 3% YoY to INR 8.6 crore, despite adjusted PAT growth.

  • Lengthy government land acquisition process for the new plant, though 65-70% complete.

  • Payment delays from customers due to bank processes and holidays impacting billing cycles.

Key financials

2 periods

Q4

  • Revenue
    ₹80.01 Cr
    YoY +12% QoQ +33%
  • EBITDA
    ₹14.3 Cr
    YoY +11% QoQ +83%
  • EBITDA Margin
    17.9%
  • Adjusted PAT
    ₹9.76 Cr
    YoY +10% QoQ +117%
  • Adjusted PAT Margin
    12.2%
  • Reported PAT
    ₹8.6 Cr
    YoY -3% QoQ +91%
  • Reported PAT Margin
    10.7%

FY25

  • Revenue
    ₹261.82 Cr
    YoY +9%
  • EBITDA
    ₹41.54 Cr
    YoY +17%
  • EBITDA Margin
    15.9%
  • Adjusted PAT
    ₹26.61 Cr
    YoY +10.4%
  • Adjusted PAT Margin
    10.2%
  • Reported PAT
    ₹25.44 Cr
    YoY +6%
  • Reported PAT Margin
    9.7%

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

₹331 Cr

as of 2025-03-31 quantified

Execution

3 to 6 months execution time for defence orders; 12 months for new plant capacity build-up.

Composition

  • NEXA (client type) 28%
  • Defence (client type) ₹23 Cr

Pipeline

qualified rfp

Total bid submitted is INR 1,076 crore, including INR 570 crore in defence and domestic.

The company has a robust order book and significant tender bids, expecting highest ever revenues quarter-on-quarter.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹100 Cr New plan — new project phase one
    • Capacity expansion, foundry, and backward integration for new plant (Phase 1) ₹100 Cr
    I think for the new project stage wise we required the CapEx. In first phase we are targeting INR100 crore and second phase another INR100 crore. So it depends on how much capacity we required according to the market need, but initially we required INR100 crore in phase one.
  • Dividend ₹1.5/share (final)
    I would like to announce that in last meeting we announced as usual our dividend policy which we had given a 15% dividend we announced for this last financial year.
  • Liquidity Liquidity disclosed Company has some reserve fund to manage inventory without incurring interest costs and suppliers provide long-term credit.
    Our supplier is giving the long-term credit also. If we have any financial effect with this huge inventory, then only we'll think about reduce the inventory.

Guidance & targets

Revenue

  • Quarterly Revenue Revenue · All four quarters of FY26 · High confidence Highest ever revenue
    I hope that this year and this quarter also all the four quarter will give you the highest ever revenue with our robust order book and bid we submitted with our aggression in the marketing and new recruitment.

    — Rupesh Mehta

Order Inflow

  • New Order Book Growth Order Inflow · FY26 · High confidence 25% over Q-o-Q execution
    Order expectations in this financial year, we targeted what we delivered on quarter-on-quarter plus 25%. So we are expecting quarter-on-quarter execution versus new order book, 25%.

    — Rupesh Mehta

Capacity

  • Machine Capacity Capacity · by July 1, 2025 · High confidence 2,500 machines

    From 2,000 machines today

    And now this month end we are adding another 500 machine capacity. So now we have a 2000 machine capacity. After this first July our capacity will be 2,500.

    — Rupesh Mehta

Capacity Utilization

  • Capacity Utilization Rate Capacity Utilization · FY26 · High confidence more than 80%
    And this financial year, we are planning to cross more than 80%. It's quarter-on-quarter, but year-on-year, we'll cross more than 80% capacity will utilize. It is not the utilization in terms of the numbers.

    — Rupesh Mehta

Growth

  • Overall Growth Journey Growth · Medium confidence 10-12%
    So I feel that the growth journey is smooth up to 10%, 12%.

    — Rupesh Mehta

New Plant

  • Phase 1 Completion New Plant · after land receipt · High confidence within 12 months
    I think we targeted 12 months after we paid the money. In our 17 stages, we have to pay the money. So after receiving the land we are targeting phase one capacity build up with the few of the things like foundry and other thing as a backward integration. It will take 12 months but maximum we will finish within 10 to 14 months.

    — Rupesh Mehta

  • Revenue Contribution from Phase 1 New Plant · FY27 · High confidence starts slowly
    I think 27, not before that, because 12 months we required to start the plant, and after that revenue will start slowly. First quarter utilization of 50%, 75% second quarter. So gradually we'll increase the capacity so it will be on '27.

    — Rupesh Mehta

What to watch in Q1 FY26

New Plant Land Acquisition Status

very soon
Current 65-70% formality completed
Target Completion of all 17 processes

Why it matters

Timely land acquisition is crucial for the planned capacity expansion and backward integration, impacting future revenue growth.

So this is the government land and it's required all the NOCs and process. Say for example water department there is no our water or any dams is passing in this land. So this kind of NOC, electricity will give the NOC that our electric line will not be disturbed. So this kind of process is the lengthy process. But we already crossed more than 65% to 70% formality. We hope that we will complete this all the process very soon.

Risks & concerns

  • Lengthy government land acquisition process for new plant

    medium

    The process for acquiring government land for the new plant involves 17 steps, with 7 still pending, making it a lengthy process.

    Management acknowledged

  • Customer payment delays impacting billing cycle

    medium

    Billing cycle varies from 65% to 85% month-on-month due to bank processes, holidays, and customer financing issues, causing revenue to roll over.

    Management acknowledged

  • Restrictions on defence supply for potential Japanese JV partners

    medium

    Japanese manufacturers are restricted from supplying to defence sectors due to agreements, leading the company to focus on European partners for JVs.

    Management acknowledged

  • Potential for order cancellations/deferrals

    low

    Company has no general cancellation policy; only rare, case-by-case refunds for existing customers facing major issues.

    Analyst downplayed

Q&A highlights

4 direct
Funding for new plant CapEx Partial
So initially stage, it depends on the valuation, it depends on our meeting with our JV partners. If they required some of the stake, definitely we'll prefer them for the strategic partnership for the new fund. Otherwise we have some of the reserve fund 20%, 25%, we have a reserve. Some of the amount we can plan for the debt. But we are not sure how we will - we have two, three different, different option also.

Analyst questioned the funding strategy for the INR 100 crore CapEx for the new plant, and management outlined multiple potential sources (JV stake, reserve funds, debt) without committing to a specific mix.

Asked by Kush Nahar

Timeline for new plant and foundry installation Direct
Right now I think we targeted 12 months after we paid the money. In our 17 stages, we have to pay the money. So after receiving the land we are targeting phase one capacity build up with the few of the things like foundry and other thing as a backward integration. It will take 12 months but maximum we will finish within 10 to 14 months.

Provided a clear timeline for the first phase of the new plant, including foundry, which is crucial for future capacity and backward integration.

Asked by Tushar Gupta

Status of joint venture discussions Partial
In September we have some meeting in Germany because entire world, largest world manufacturers are participating in this EMO exhibition and we are arranging the meeting with few shortlisted company, preferably Europeans that about the joint venture, or about how we can utilize their worldwide distribution network. And third thing is some of the product we can manufacture in India with their brand name.

Management confirmed ongoing JV discussions, particularly with European companies, and highlighted strategic objectives like export market access and co-manufacturing, indicating potential future partnerships.

Asked by Arnav Sakhuja

Inventory buildup and its financial impact Direct
Yeah, that I told you in our last -- that right now we are not worried about the inventory. We have a 19,000 component inventory right now and we have more than 375 to 380 different type of the variant. So we cannot predict that much exactly which model order we will receive, and the lead time and logistic time is too high. Some of the component lead time is three month to four month and these all are material Pratikji is with the credit. You don't have to pay immediately. Whatever the inventory you are using you have to pay. 70% payment is the once you utilize then you have to give the payment. So we are not worried about the dues we have to pay on time.

Addressed analyst concern about high inventory by explaining it's strategic for diverse product variants and long lead times, and financially mitigated by supplier credit terms.

Asked by Pratik Srivastav

Order inflow drop in Q4 FY25 and market dry-up Direct
The pressure that came in March, everyone wanted machines ready, which was a limitation of capacity for us. For this, in Q4, in February and March, the machine's lead time is impossible in 2, 3 months in that type of machine, you will have to give it with a penalty. In some orders, we said that it is impossible before Q1. So that is one reason some of our orders have been reduced. And the rest, there has been no significant change in the market because in Q4, from order to execution, the overall highest ever remains.

Clarified that the perceived drop in Q4 order inflow was due to capacity constraints and long lead times, leading the company to decline some orders, rather than a market dry-up, reassuring about underlying demand.

Asked by Samarth Nagpal

Problem of customers arranging finances/payment delays Direct
So year-on-year, the cycle of billing, Rajeshji is based on 85%. Month-on-month, 65% in April, 65% in May, 75% in June. So month-on-month, because of the festival season, where there will be Navratri, Dussehra holidays, the banks are closed. In the time of Diwali, there is a one-week bank holiday. So in some months, 65% in some months, the name that has come from the field, 85% of that, 100% in the month-on-month, the projection that has been obtained from the branch, the bank fund does not come in that. And according to that, if we have to plan the billing, then we have to increase the booking accordingly. So 65% to 85% is the lowest to highest average month-on-month. The more banks are closed, there will be no payment on that day. The billing of that, Rajeshji, will roll over and go in the next month.

Management acknowledged and explained the variability in billing cycles and payment delays due to bank processes and holidays, indicating a recurring operational challenge that impacts revenue recognition.

Asked by Rajesh Bhat

3 min read 7 chapters

Detailed narrative

Q4 & FY25 Financial Performance Highlights

Macpower CNC reported its highest ever quarterly revenue of INR 80.01 crore in Q4 FY25, marking a 12% YoY and 33% QoQ growth. For the full fiscal year 2025, revenue reached a record INR 261.82 crore, up 9% YoY. EBITDA for Q4 FY25 was INR 14.30 crore, with a margin of 17.87%, showing an 11% YoY and 83% QoQ increase. FY25 EBITDA stood at INR 41.54 crore, with a 15.87% margin, growing 17% YoY. Adjusted PAT for Q4 FY25 was INR 9.76 crore (12.20% margin), up 10% YoY and 117% QoQ, while FY25 Adjusted PAT was INR 26.61 crore (10.16% margin), up 10.4% YoY. However, reported PAT for Q4 FY25 saw a 3% YoY decline to INR 8.6 crore.

Robust Order Book and Bidding Pipeline

As of March 31, 2025, Macpower CNC achieved its highest ever pending order book of INR 331 crore, including 168 main machines. The NEXA segment contributes 28% of this order book, with 465 machines. The company also secured its highest ever defence order book of INR 23 crore. Furthermore, Macpower submitted its highest ever bids, totaling INR 1,076 crore, which includes INR 570 crore in defence tenders. Management expects a minimum 10% win rate on these tenders.

Product Development and R&D Initiatives

In the last financial year, Macpower CNC developed over 37 new product variants and new products. These include a Drill Tap Center and a high-speed drill tap center for the electric EMS sector. They also launched new machines like a two-spindle vertical machining center with a two-pallet changer, capable of producing four components simultaneously. A new 1.5-meter turn-mill center has been developed for the defence sector, and the company is executing high-value machines like the INR 2.5 crore HMC MHX 800 for defence, requiring high speed and accuracy.

Capacity Expansion and Operational Efficiency

The company is actively expanding its manufacturing capacity. Currently, it has a capacity of 2,000 machines, which will increase to 2,500 machines by July 1, 2025. This expansion aims to cater to the growing demand and allow the company to entertain large corporate clients. Additionally, Macpower has installed solar captive consumption, reducing its daytime power bill by almost 90%, leading to lower power costs. The company plans to utilize over 80% of its capacity in the new financial year.

Strategic Initiatives: Exports, JVs, and New Markets

Macpower CNC is focusing on capturing the export market and is participating in the German EMO exhibition in September, the largest in the world, to meet foreign manufacturers for potential joint ventures. Discussions are underway with European companies for JVs, as Japanese partners have restrictions on defence supply. The company has also expanded its sales and service network to 39 cities, with 220 personnel, and increased its tech centers and branch offices, contributing to an increase in its order book.

Capital Expenditure and Funding for New Plant

The company plans a CapEx of INR 100 crore for the first phase of its new project, with another INR 100 crore for the second phase, depending on market needs. This CapEx will be used for capacity build-up, including a foundry and backward integration. The first phase is targeted for completion within 12-14 months after receiving the land. Funding options for this CapEx include strategic partnerships with JV partners, utilizing reserve funds, and debt, with the company exploring multiple avenues.

Defence Sector Focus and Opportunities

Macpower CNC is increasingly focusing on the defence and aerospace sectors, expecting them to be a major revenue driver in the coming year. The company has supplied high-value machines (INR 8-9 crore each) to NCR customers and bomb shell manufacturers in Maharashtra, indicating significant indirect contributions to the defence sector. The government's push for defence manufacturing and privatization is creating substantial opportunities, and Macpower is positioning itself for significant growth in this segment.

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