Macpower CNC Machines Limited (NSE: MACPOWER) The Gujarat-based manufacturer of computerized numerically controlled machines achieved record quarterly profitability, supported by a shift toward high-margin defense and aerospace components and improved operating leverage through backward integration.
The company in its financial results for the quarter ended December 31, 2025, demonstrated significant year-over-year gains in revenue and net income and reported its highest-ever quarterly EBITDA and profit after tax, driven by demand for precision machining and the successful transition into higher-value industrial segments.
Key Development
The company’s unaudited standalone financial results showed a 42.6% increase in quarterly revenue to ₹86.15 crore. The primary driver for recent performance is a strategic pivot from basic lathe machines toward a platform-led model featuring advanced 5-axis and high-speed machining centers. The company is currently utilizing 80-85% of its 2,500-machine annual capacity.
Product Highlights
The company has expanded its product universe to over 380 variants across 27 segments, including the NEXA premium range and 5-axis machines. Recent developments include the Macatrol in-house controller and low-cost automation kits designed to deepen the company’s intellectual property moat. Macpower is actively pursuing contracts in regulated sectors, having supplied over 200 machines to 35 defense factories and 100 machines to six aviation facilities, including HAL and ISRO.
Bid Pipeline
Macpower CNC Machines has a total bid pipeline of approximately ₹958 crore, of which ₹319 crore is specifically dedicated to the defense and aerospace sectors. The specific defense projects and entities fueling this bid pipeline and current participation include:
- DRDO-Brahmos Project: Participation in projects related to the supersonic cruise missile.
- ISRO-Chandrayan 3 Project: Ongoing involvement following the successful supply of machines for the lunar mission.
- T90 Tank Modernization: This includes supplying Horizontal Machining Centers (HMC) to the Engine Factory AVADI for T90-BHISHMA battle tank engine parts.
- BSF-MMG Gun Manufacturers: Supplying machinery for the production of Medium Machine Guns (MMG) for the Border Security Force.
- Heavy Vehicle Factory: General participation in projects for large-scale armored vehicle manufacturing.
- Aviation and Aerospace Factories: The company has already supplied over 100 machines to six aviation factories, including HAL for projects like the LCA MK IA (Tejas).
Financial Performance
For the quarter ended December 31, 2025, revenue from operations reached ₹8,614.50 lakhs, compared to ₹6,040.01 lakhs in the corresponding period of the previous year. Net profit for the period rose to ₹979.34 lakhs from ₹447.12 lakhs YoY. Earnings per share (EPS) increased to ₹9.79 from ₹4.47. The EBITDA margin expanded by 515 basis points to 18.1%, attributed to operational leverage and a favorable product mix involving high-end Vertical Machining Centers (VMC) and Horizontal Machining Centers (HMC).
For the nine-month period ended December 31, 2025, the company recorded total income of ₹233.15 crore and a profit of ₹23.73 crore.
The balance sheet shows total equity of ₹142.82 crore as of March 31, 2025, and the company maintains a zero-debt status.
Business Outlook & Strategy
Management has outlined a transition to a new 30-acre greenfield plant with an eventual capacity goal of 10,000 machines per annum, which represents a fourfold increase from current levels. The strategy involves reserving 50% of this new capacity for defense work. The company is targeting 25% EBITDA margins through further backward integration of critical components like spindles and sheet metal. Additionally, Macpower is evaluating global partnerships for technology and co-branding to expand its export mix.
Sector & Macro Context
The reported results occur amid an industrial capital expenditure cycle in India, characterized by increased indigenous manufacturing requirements in the defense and aerospace sectors. The company’s focus on “China+1” sourcing strategies and technical pre-qualification for large-volume public sector contracts positions it within the broader trend of domestic capital goods expansion.
Investment Thesis (Bull vs. Bear)
Bull Case:
- The company’s pivot to high-moat sectors like defense, supported by a ₹375 crore order book and a ₹958 crore bid pipeline, provides substantial revenue visibility.
- Margin expansion is supported by 90% daytime solar power savings and the indigenous development of CNC controllers, reducing reliance on expensive imports.
- The debt-free balance sheet and 73.17% promoter holding indicate financial stability and management alignment with shareholders.
Bear Case:
- Future performance is heavily contingent on the successful execution of the ₹100 crore Phase-1 greenfield expansion and the conversion of bids under evaluation into firm orders.
- Any slowdown in industrial capex or delays in the evaluation of large-scale defense tenders could impact the projected 20-25% medium-term volume growth.