Macpower CNC
- Company was established in 1980 named as Modern Machine Tools
- Mr. Rupesh Mehta Managing Director
- Rajkot, Gujrat Based Company
- In 2003 Macpower CNC machine Pvt Ltd was incorporated as they setup their CNC machine assembly unit.
- In 2018 it was listed in NSE SME platform, and in 2020 they migrated to NSE main board.
- 8 acre manufacturing facility in Rajkot.
- 2022 capacity was enhanced to 1100 unit manufacturing.
- 2023 capacity enhanced to 1500 units per annum.
- FY25 target is 2000 units per annum to cost Rs. 9 Cr for expansion.
- Presence in 14 States with 39 sales center in From Punjab to Tamilnadu and Gujrat to West Bengal.
- Promoter Holding is at 73.17%
- OPM is at 9% Avg before Q2 FY24, IN Q2 FY24 it is at 14.23%
- PAT at 6% before Q2 FY24, IN Q2 FY24 it is at 10%
CNC machines stands for Computer Numerical Controlled which uses Pre programmed softwares combined with Engineering Designing to achieve desired cuts.
Company is into making of different type of CNC machines;
- CNC turning centers
- Vertical Machining Centre (VMC)
- Horizontal Machining Center (HMC)
- Twin Spindle VMC
- Twin Spindle Turning
- Vertical Turret Lathe
- Drill Tap Centre
- Double Column Machine
Catering to Industry: - Auto
- Defense- DRDO, Indian Ordinance Facotry etc…
- Capital Goods/ Engg
- PSU- Indian Railway/ ISRO
- Die Mould Sector
- Agriculture
Sector update:
- CNC machine making sector is 67% unorganized only 37% is organized
- India bought CNC machines worth Rs. 18000 Cr in FY23 and only Rs. 9000 Cr was supplied by Domestic supplier rest all was imported. (Some high end imported CNC machines cost 2.5 Cr. Now India is making the same at Selling price of Rs. 1 Cr).
- The make in India initiatives and China +1 is driving the manufacturing landscape in India. Current Manufacturing to GDP ratio to change from 17% to 25% by next decade.
- China consumption per month (approx. 25000 units) is almost equals to what Indian CNC manufacturers make per annum.
Company Financials;
- In Q2 FY24 company sold 332 machines.
- Out of this 326 (Avg Selling price of Rs. 18 Lakhs per piece) was sold to private customers and 6 to Govt (Avg selling price of Rs. 56 lakhs). Total rev of Rs. 63.1 Cr.
- They have Rs. 190 Cr order book for Q3 Fy24. All orders are on advance payment basis and no orders are fulfilled without advance payment.
- Currently Rs. 9.3 Cr as advance is with the company against orders received.
- They have zero debt
- Lowered direct and Indirect cost control and brought the expense down even when the volume grew. Currently 25% operating cost by keeping the cost same but improving the productivity.
- 5% less expense compared to Q1 over Revenue of business.
- Defense business is to grow by 40 to 50%.
- Every month if they dispatch 4 machines they get orders for 5 new machines so in net they have 20 to 25% extra orders every month.
- Sales force to increase from 79 to 100 by Nov 2023.
- Backward integration for high costing product like Turret and ATC (currently being outsourced costing Turret Rs. 1 lakh and ATC Rs. 1.5 Lakh), getting it made inhouse. For this capex of Rs. 14 Cr is about to be done from inhouse accruals. This will improve EBITDA and PAT. This will add ~2% to EBITDA.
- Business share wise Macpower is around 2% and basket wise they have 335 models which will help them cater to more type of customer requirement.
- Every year commitment of 20 to 25% growth is the management commentary.
- 400 Cr revenue is possible if unit manufacturing capacity grows to 2000 units per annum.
- Company focus is keeping debt zero, increasing topline and keeping the cost of operation under control through higher productivity. Using internal accruals for expansion.
- Challenge is of distribution network where Macpower is trying to build.
- Focus of company is keep sustaining and improving EBITDA and PAT 14 to 15% now to 20% PAT once 500 Cr revenue is achieved in future.
- They buy RM on credit and sell the CNC machine on cash basis.