Macpower CNC Machines: Manufacturing a Strong Growth?

Coming up with a new faclity for aerospace and defence which will be 4 times of current capacity.

Some rough calculation on Macpower CNC:

1. Their average blended realization is 19 Lakh per machine which is likely to increase as they sell more high value machines (4 axis and 5 axis machines).

2. Jyoti CNC (recent ipo) has an average realization of 27 Lakh.

3. Macpower realization can also increase to 21-22 Lakhs.

4. Hence at peak utilization, macpower can do 440 Crore of revenue (22 Lakh * 2000 Machines). I assume they can do the peak revenue by FY26.

5. At 15% margins they can generate ebitda of 66 Cr (FY26) vs 21 cr in FY23

Now let’s look at the bigger picture

1. The new facility will be 4x of current facility (i assume new facility will have the capacity of 8000 machines)

2. Jyoti CNC has an order book of 3300 cr, primarily into Aerospace & Defence which required 4-5 axis machines.

3. Jyoti CNC mentioned this new order book will have blended realization of 50 Lakh (as Aerospace & defence are a higher realization segments)

4. Macpower’s new facility will also cater to aerospace & defence. I assume the blended realization for macpower will increase to 40 Lakh (assuming less then Jyoti).

5. At peak utilization Macpower will be able to do the revenue of 4000 cr (10000 Machines * 40 Lakh).

6. Assuming 20% margins due to operating leverage. It can do EBITDA of 800 cr.

7. Even we estimate lower PAT growth then the EBITDA growth due to higher depreciation or interest cost.

8. PAT can be 500-600 Cr (Current market cap is 700 Cr)

Now the only question is when?

Note: These are my rough estimates, actual estimates could be very different from this. I could be biased, please make any decision as per your analysis.

https://x.com/Alazyinvestor13/status/1744762935988384207?s=20