Macpower CNC Machines LimitedQ1 FY27 Results & Financial Update

Management stated that ongoing West Asia conflicts have a 0% impact on business since exports are not a primary focus, and critical imported components like ball screws and LM guideways are secured by a one-year inventory buffer from Taiwan.

While possessing 5-axis technical capability, management views it as a niche market burdened by strict compliance (such as BAFA agreements) and high diversion risks, and expects to sell only 1-2 units annually.

Pending order book stands at INR456 crores (up 32% y-o-y). Domestic bids submitted stand at INR739 crores (including INR304 crores under evaluation for defence and aerospace), and domestic quotations in the pipeline exceed INR1,043 crores.

Management remains focused on a mixed order intake spanning general engineering, job work, die-and-moulds, and approximately INR20 crores for defence, avoiding heavy segment-specific distribution cost inflation until market share scales significantly.

The INR50 crore expansion project on 13 leased acres targets completion within 12 months. It qualifies for a 25% capital subsidy (disbursed over 5 years) and a 7% interest subsidy, lowering net borrowing costs to around 1.25% per annum.

Current annual capacity of 2,500 units is expected to run at over 90% utilization in FY27.

Average machine realization stood around INR20.9 to INR21.9 lakhs in Q1. Price increases of 4% to 6% were implemented effective June 1st across applicable unlifted orders to offset raw material cost pressures.

Trade receivables reduced to INR33 crores at the end of Q1, down from the level at the close of Q4.

Maintains high inventory levels across approximately 19,000 components and 364 variants to ensure rapid dispatch capabilities and secure bulk purchasing discounts, despite rising working capital requirements.

Management upgraded full-year revenue growth guidance to over 30% (previously 28%-30%) and expects EBITDA margins to expand sequentially.

Management clarified that quarterly seasonality follows traditional capital goods patterns (weaker Q1, stronger Q2/Q3, and peak Q4 at 30%-35%), backed by strong material availability and order books.

Management noted that current in-house manufacturing handles 40% to 45% of component count (higher for key parts like spindles and powder coating), with plans to scale component manufacturing to 75%-80% over the long term.

Management explained that EMS sector orders utilize high-speed drill type centres with 20,000 RPM spindles for tier-3 suppliers making electronic components, but extensive credit demands mean targeted cluster expansion will wait until overall market share exceeds 10%.

Management highlighted that the centrally air-conditioned (26°C) 1.5 to 2 lakh sq. ft. assembly facility will eliminate thermal expansion issues during machine calibration, lower operating costs, and meet institutional/defence compliance standards.

Management confirmed that EBITDA margins are expected to trend higher sequentially due to operating leverage and increased execution of high-end models, reiterated zero export reliance, and noted ample single-source component buffer.

Management stated that the 13-acre land and upcoming facility will support next-year growth beyond the 2,500 units existing capacity cap, with detailed ROI calculations to be shared in Q3.

Management noted that Q1 new order inflows continued strongly, and while NEXA models comprise ~40% of the order book, average realizations will float between INR20-21 lakhs depending on the mix of turning machines and heavier units.

Management detailed price bands as low-end machines (INR12 to INR20 lakhs), middle range (INR20 to INR30 lakhs), and high-end machines (INR30 lakhs up to INR2 crores).

Management defended high inventory holdings as a core competitive advantage given 364 variants and 19,000+ components, allowing immediate fulfillment and procurement discounts that outweigh holding costs.

Management reiterated that bulk credit demands from specific clusters will be avoided until market share reaches 10%, keeping reliance on secure advance and bank/PSU payment channels.

Management stated that the INR50 crore project funding will be managed primarily through internal accruals (INR20-25 crores currently available plus ongoing cash generation) and low-cost subsidized debt under the new state industrial policy.