Macpower CNC Machines: Manufacturing a Strong Growth?

Some insights from the Q1 Con-call.

1. In answering the first question Mr. Rupesh Bhai Mehta said the average realisation will increase to 25 lakhs at the end of the year.

I hear = 22 lakhs per machine x 1605 machines ( 80% utilization ) = 353 crs of revenue

2. In answering the second question Mr. Rupesh Bhai Mehta said margin can improve to 27%

I hear 19% Op margins for the entire year = 67 cr
Other income 1 and depreciation as 6 take my PBT to = 62 cr
And PAT to = 46.5 ie. Another doubler of PAT for 2 connective years without diluting equity and without taking debt = High ROCE/ROE

3. FY 25 = 24 lakhs per machine x 2300 machines ( 85% capacity utilisation ) = 552 cr

With 24% operating margins = 132 cr
Other income 2 and depreciation 8 take my PBT to = 123
PAT for FY 25 = 92 cr = another possible doubler in FY 25 before the new plant comes up for 2000 machines and doubles the PAT again for the following year but with newer tech available from the new Japanese JV partner and exports markets get accessed through their network.

Reminder, 8% GST return and 200% of research expenses return in the new facility will flow straight to PAT and increasing PAT Margins closer to 20%+. Lately Unheard in the manufacturing space.

Long-Term Vision: I plan to reassess my investment only after the new facility starts production in two years. This decision is grounded in confidence in the company’s strong capital allocation strategy within a supply-side dominant sector. The focus will be on assessing the execution of capital allocation, the associated ROCE/ROE, and, most critically, the management’s commitment to securing superior technology through the JV—ensuring no compromise on technology quality, which is currently unavailable in India.

For further learning we must understand that, The five most important players in the Japan Machine Tool Builders’ Association (JMTBA) based on their global influence, market share, and technological advancements are:

1. Fanuc Corporation
2. DMG Mori Co., Ltd.
3. Yamazaki Mazak Corporation (Mazak)
4. Okuma Corporation
5. Makino Milling Machine Co., Ltd.

Ranking by Network Size:

1. Fanuc Corporation – Largest worldwide network, extensive in over 100 countries.
2. DMG Mori Co., Ltd. – Strong global presence in more than 80 countries.
3. Yamazaki Mazak Corporation (Mazak) – Extensive manufacturing and technical center network.
4. Okuma Corporation – Broad international presence but less extensive than Fanuc, DMG Mori, and Mazak.
5. Makino Milling Machine Co., Ltd. – Focused global network, especially in key markets.

This ranking is based on the global footprint of these companies, considering factors like the number of international offices, subsidiaries, distribution channels, and service centers. Fanuc leads due to its unmatched global reach and extensive presence across various regions.