Macpower CNC Machines Ltd (NSE: MACPOWER) Q1 2026 Earnings Call dated Aug. 07, 2025
Corporate Participants:
Unidentified Speaker
Rupesh Mehta — Chairman and Managing Director
Analysts:
Unidentified Participant
Rajesh Bhatt — Analyst
Arpit Agarwal — Analyst
Presentation:
operator
SA. It.
operator
I’ll begin the recording sir. I’ll start the introduction and begin the recording. Yeah.
operator
Okay. This meeting is being recorded.
operator
Ladies and gentlemen, on behalf of Captify Consulting Investor Relations team I welcome you all to the Q1 FY26 post earnings conference call of Mac Power CNC Machines Limited today on the call from the management we have with us Mr. Rupesh Mehta, Chairman and Managing Director along with his management team. As a disclaimer I would like to inform all of you that this call may contain forward looking statements which may involve risk and uncertainties. Also a reminder that this call is being recorded. I would now request the management to brief us about the business performance highlights for the quarter ended June 2025.
The growth plan and vision for the coming year post which we will open the floor for Q and A. Over to you sir.
Rupesh Mehta — Chairman and Managing Director
Thank you very much Vinay. Good afternoon everyone. First of all I earnestly welcome you all to Q1 FY26 post result conference call. We appreciate that you have taken out time for from your busy schedule to attend this call. Thanks for being in this call. We will have a brief about the overall performance of the company for the quarterly ended 13 June 2025 post which I will take you your questions. The financial result of result and presentation have been posted on the company’s website and hope that you have had an opportunity to go through the same.
I would quickly run your through some result highlights first then we will discuss more about our business. Q1FY26A Revenue Standard Rupees 61.03 crore which is highest ever for any quarter in Magpower history. YOY revenue growth is 21.53%. EBITDA stand 7.92 crore which is the highest ever for any quarter in Mac power history. YOY EBITDA growth is 20.53% pet stand rupees 4.56 cr which is also a highest ever for any quarter. Pet growth at 13.42%. Now in this quarter depreciation is also increased by 46% 46 lakh rupees which is higher than because of our last year Capex.
The depreciation in Q1 is increased by 46%. Strong order book pending order book Also a highest ever pending order book 346 crore order book we have right now compared to Q1 versus last year it was 283. So Q quarter on quarter order growth is 22%. Domestic bid we submitted through our branches is 608 crore and tender business like defense, PSU and education sector where our tender bidding value is 494. So total bid submitted is 11. Oh true. So because of this strong order book and compared to last year it Is grow by 22%. As I told you in my last phone call that we are trying to focus to increase the 20% minimum order book growth.
And that’s why I think we hope that in quarter 2, quarter 3, quarter 4, all the quarter will make the all time high record on Q&2. So Vinay, shall we start the question and answer or anything Is you wanted?
operator
Sure, sure. Just one correction sir. I think when you’re mentioning the highest ever revenue in EBITDA, that is for Q1 in any past and previous year.
Rupesh Mehta — Chairman and Managing Director
Yeah. Q1, yeah. Compare with the quarter on quarter.
operator
Yeah.
operator
Yes, we’ll take question, we’ll take the first question from Dhaval Shah. Double. You can go ahead please.
Unidentified Participant
Yes, hello. Thank you, thank you for the opportunity. First of all a great numbers of 20 growth is very, very encouraging and in line with the guidance which you have shared. Secondly, the, the new investor presentation is also quite good. It is covering a lot of information and, and quite very well made. So now my questions first question will be you have mentioned about the expansion project and you have given a roadmap for the next five years for our company. So how do we plan to support this expansion in terms of financing it? And where do you see our company over the next three to five year period for the length of long term shareholders like us.
If you can help us give us a road map it’ll it will be, it will be very helpful. And how do you also uh see the mix of uh, bank borrowing uh and plus our own equity. Uh, how do you see that makes uh also going forward to support this acquisition? Second question will be now when do, when we embark on this journey of expanding our capacity to 10,000 and 15,000 machines? How, how will Mac Power come closer to the other companies which are getting much higher valuations and much better investor attention? How do we come closer to them in terms of the EBITDA margin? So also help us understand what is your plan to increase the EBITDA margin of the company.
You mentioned about a lot of customers in our presentation and you are mentioning a very important point of that you want to move away from being a price taker to someone who can command the pricing and sell the machines at your price. So also if you can more elaborate that what is the reason for writing this price taker point in the presentation? Yeah, these Are my questions. Thank you.
Rupesh Mehta — Chairman and Managing Director
So Dolby, first of all about the capacity and a growth. We have a two different plan for growth and capacity expansion. First of all, 2000 to 2500 we have a Janmashtami holidays year. So from first this first September we are adding another 500. So now for a short term capacity increase will be 2,500 from the September first week. So we are shifting after this holiday some of the assembly to the new capacity. So it will take two to three days. So we are fully operates. And from the first week of September so 2500 machines. And as I mentioned in our presentation and in my last phone call about the expansion.
So now we have a few foreign joint venture partners Also already we completed the few meetings and tomorrow also we have one more meeting and it will take time for the joint venture because some of the condition they are agreed, Some of the condition we are not agreed. But before starting this new plant we will come out with some conclusion about the joint venture. Particularly my visit to the September German exhibition where McGowan is also participating. So this is the about the joint venture and about the new capacity expansion. Now we modified a little bit our new plant projection whatever capacity and whatever land we demanded.
Now there is a one another land which a double size maybe 50 plus acre instead of 30 acre. And they offered us that why you want this? We have this new one is available and with our joint ventures meeting, whatever projection they are demanding or whatever the facility they are asking us we require little bit more land. So this is a good news that government is helping us for the more lands. And almost 90% of the work some of the religious matter. Who are the Mamladar who are taking care of this file? Father is died.
So one week is delayed. Otherwise I hope that within collector is giving the order that within 30 days you have to complete the all formalities and send the file to the ministry. So we hope that in a broader view in December I think we’ll announce about the new facility and new construction work and new background integration planning in first stage. As I mentioned, 20002500 machines we are adding and we have a sufficient land and facility will be available. As we create the distribution network, we create the demands, we create the new product basket, we create some of the foreign partners assembly line will increase the capacity by as demand will increase.
So in first phase we are adding 2,000 2,500 machines and our EBITDA margin. If we are completing this new plant it will be increased to 22 to 25% minimum as because some of the things we are going to manufacture as a backward integration in house facility which will definitely increase the margin. And second thing is we are morely focused on the iron product. Nowadays we have a Naxa groups is activated as I told you in last phone call that we are separating the our regular business and NEXA business. Now we have a one most senior vice president is with us and is taking care from Pune branches for the Nexa.
We already appointed nine people in nine city for the NEXA focus. The NEXA is for the iron only and for the corporate only. So I think in this quarter two will generate the very good revenue from the NEXA basket also. And definitely we’ll get the good EBITDA margin in quarter, on quarter and after capacity will expansion. Yeah. And about price what is your question about voices? No.
Unidentified Participant
Yeah my question was that how do we plan to fund this 100 crore expansion.
Rupesh Mehta — Chairman and Managing Director
So I think in this government scheme there is a 50% of interest cost he reimbursed from the government. So if I am getting the fund from bank it may charge 8% 9% and then half of the interest I can get as a reimburse. So we not discuss that much seriously that we’ll discuss with our ir, our merchant banker and our charter accountant firm about the finance management. But in a initial stage if government is giving the 50 subsidies then I think compared to debt compared to equity that is the cheaper. So in first phase I think we’ll not get any will not dilute any equity.
But it will maybe after we receive the land we’ll decide what to do because some of the person if JV partner will ask. So strategically we have to give that. So we’ll use that fund as a our expansion. But right now we are not that much clear about the fund.
Unidentified Participant
Okay. Okay. So in the presentation you mentioned about 18% EBITDA margin on the new CapEx. Right on the on slide number seven. And you are mentioning an EBITA margin of 20 to 25%.
Rupesh Mehta — Chairman and Managing Director
So you asked me about the how how much highest we can get. But once our capacity utilization will increase if we add another 2500 machine and our capacity utilization is 40005000 machines. And if we focused on the iron machine through our NEXA market so maximum we can stretch that EBITDA margin up to 22 to 25%.
Unidentified Participant
Okay. And after September, after next month our total capacity will be how much after add 500 machines.
Rupesh Mehta — Chairman and Managing Director
2,500 machines.
Unidentified Participant
2,500 machines. Okay. And and and and and what is the order book right now for the number of machines?
Rupesh Mehta — Chairman and Managing Director
330.
Unidentified Participant
How much? 346.
Rupesh Mehta — Chairman and Managing Director
346cr because we have a sum of the double column HMC Nexa product also so it’s in value wise is 346cr.
Unidentified Participant
And in number of machines approximately it will be how many machines around? How it says 171800 machines.
Rupesh Mehta — Chairman and Managing Director
No, no not that much. 1715.
Rupesh Mehta — Chairman and Managing Director
1715 machines. 1715. That’s the closing order book right now.
Unidentified Participant
Okay. Number of machines. Okay fine. And so this year you know given the order. So last last year we did 260 crore of revenue and so so this year what is the. What sort of growth are you looking at? At the. How is the economic environment, the business opportunity which you are seeing right now? What do you think you’ll be able to do this year?
Rupesh Mehta — Chairman and Managing Director
Business environment is not that much disturbing us because as I mentioned in my last phone call that India’s production our market share is just 4%. India’s consumption our market share is 2%. We need to focus more on distribution network service and new product development. That’s why last year in last year we developed Tom 200 Tom 200 ys which this machine we develop display in the IMO Germany mono 300 super DCM4 triple two. The DCM 4222 delivery we are giving on September so It’s already developed DCM3216VMC so to I think some of the product which is not in our basket.
So we are developing the new product basket. We are focusing on the new area. We are focusing on the corporate sector right now and to compile all these things and our strong order book 346 and every month whatever the order we are receiving our dispatch is higher. Higher.
Unidentified Participant
Yeah.
Rupesh Mehta — Chairman and Managing Director
So we hope that all the quarter on quarter comparison will break the all the records. All the quarter in history will be the highest ever.
Unidentified Participant
Yes. So be in January20.
operator
Dhaval, may I request you to join the queue please.
Unidentified Participant
Okay fine.
operator
We’ll move on to the next participants. Ara and may I request the participants to limit their questions to two per participant.
Rupesh Mehta — Chairman and Managing Director
Yes. Arnau.
Unidentified Participant
Hi. Congrats on a good set of results. So thank you. So my first question is could you help us with the volume growth data for this quarter along with the split for NEXA machines. Ah.
Rupesh Mehta — Chairman and Managing Director
That. That breakup we are not putting right now in our display. Sometimes we observe that this data is very helpful for the some of the our peers company. But I. I will share this data afterwards.
Unidentified Participant
Okay. Sure. Thank you. And my next question is. So what is the progress that we have made with regards to supplying for the aerospace and defense industry? If you could just highlight that a bit
Rupesh Mehta — Chairman and Managing Director
Defense industries.
I think same thing will happen because of the some of the order we already executed and some of the good order book. Right now we have from the defense. So the this year also same thing that defense will highest ever in our magpower in history. And we have more than out of 460 70cr tender bidding. The 80% bidding is from the defense. And right now we have a highest ever order book from the defense and still we have another two quarters. So defense is growing very well. Aeronautic. We are just started. We just started because we have a very good application head because we required the good applications team to calculate the aerospace industries.
And right now one of the India’s big aerospace manufacturer required 240 machines. And they had given us the drawing for the calculation also. So they are also considering us from the out of another three or four Indian manufacturer. They considered us and invited us. And this time we are discussing and we are trying to prove out their component in aerospace industries. And the requirement is 260 machines. So Aerospace will take another one or two quarter. But Defense business is jumped by almost double in this financial year.
Unidentified Participant
Okay, thank you for answering my questions.
Rupesh Mehta — Chairman and Managing Director
Thank you.
operator
Thank you. Arnold. We’ll take the next question from Mahit Talati. Please go ahead.
Unidentified Participant
Yeah. Hi sir. Thank you so much for the opportunity. Yeah. Hi sir.
Rupesh Mehta — Chairman and Managing Director
Yeah, Magdi, thank you. Yeah,
Unidentified Participant
yeah.
Unidentified Participant
So sir, just wanted to understand. So in your opening remarks you mentioned that government is giving us another 50 acre land. So it is it additional 50 acre or they are replacing the 30 acre with the 50 acre.
Rupesh Mehta — Chairman and Managing Director
That is our demand was 30 acre and it is not in a one place, it is a nearby place. So they suggested that we have another good land in the single place which is more than 50 acres. We already measure that land. We already paid the primary charges of measuring the land to the relevant department. And now they will give us the 1% processing charge. It means your all the process is completed. Now you can proceed for the 1% processing chart. So we are very close to one person processing chart. This is a 50 acre, not a 30 acre.
The land location is changed. Now instead of 30 more than 50 we are getting in within short time.
Unidentified Participant
Oh, so we will be getting two lands or just one land of 50 acres.
Rupesh Mehta — Chairman and Managing Director
One line of 50.
Unidentified Participant
So this 30 acre land which we are expecting to get by December Instead of the 30 acre we will be getting the 50 acre land, correct?
Rupesh Mehta — Chairman and Managing Director
Yeah. Instead of 30 they offered a 50 and it is very good location also in a single place. So we. We. We agreed and because as we discussed with some of our JV partners I think some of the facility we required some more land. So we agreed with this land and now we are proceeding with the 50 plus acre land instead of 30.
Unidentified Participant
So we have to go through the entire uproar process again or
Rupesh Mehta — Chairman and Managing Director
we have.
Rupesh Mehta — Chairman and Managing Director
To just change the location and we have to change the one area, nothing else. The remaining everything is same and you already done. Now we are very close to pay the 1% processing charge.
Unidentified Participant
Okay, so this 50 acre will be received by December. That’s
Rupesh Mehta — Chairman and Managing Director
maximum.
Rupesh Mehta — Chairman and Managing Director
Maximum. Maximum.
Unidentified Participant
And so the. Okay, so once the land parcel is increased the capex which we have mentioned of of 10,000 machines that will also increase, right? Or it will remain.
Rupesh Mehta — Chairman and Managing Director
No, no. Our capacity we can put the maximum capacity more than 10,000 machine with the new land and new area but will not put 10,000 machine capacity at a single time because ROI and the demand also will not increase that much. So gradually will increase the 2000, 2000, 2000 according to the market, according to the demand, according to our JV partners requirement will add the capacity but we have enough space to increase the capacity new capacity more than 10,000 machines.
Unidentified Participant
Okay. And sir, just wanted to understand your thought process. So currently we have an order book of close to 340 crores and we are now having the capacity in hand also. So just wanted to understand thought process. How quick are we planning to increase our order book going forward? And how will we have a growth trajectory in this order book?
Unidentified Participant
Growth?
Unidentified Participant
Because we are not targeting the corporates as well. So what is our plan of action going forward with the new land and new capacity? Starting.
Rupesh Mehta — Chairman and Managing Director
For the increase of the order book we are already I think in our data also our order book is increased by 22% YoY so my target was 20%. But more than that we are increasing and for the land process as I told you it’s already in a process. In December we’ll get the land but we are now very much aggressive for the distribution network. If you can see our manpower breakup in our presentation we increased our manpower almost double compared to last year first quarter and we added new cities also for our distribution network and we added new product basket also last year there is only one double column machining center but thus this year will cross the more than double digit double column machining center.
So we are focusing on the higher product so in terms of the value our target is to increase the order book quarter on quarter minimum by 20%.
Unidentified Participant
Okay.
Unidentified Participant
So.
Unidentified Participant
Yeah.
operator
Yeah. Request you to please rejoin the queue.
Unidentified Participant
Yeah.
operator
Thank you. We’ll take the next question from Rajesh Bhatt. Please go ahead.
Rajesh Bhatt — Analyst
Good afternoon. The order book. New order. New order received in the quarter. I was looking at that in your presentation. From Q1FY25 to Q1FY26 every quarter it is kind of in the same range. In Q125 it was 68 crore. And then Q2 it went to 88. Then Q3 May 70, Q4 May 78. And this quarter May 74 crore approximately. Is there any challenge with the demand from private parties? Is there a reason why that is not increasing?
Rajesh Bhatt — Analyst
Rupesha
Rupesh Mehta — Chairman and Managing Director
[Foreign Speech]
Rajesh Bhatt — Analyst
Thank you.[Foreign Speech] What is the average realization in this quarter per Machine?
Rupesh Mehta — Chairman and Managing Director
Average Realization 19 Point Something Average Price Tender Key or 4 Meter Double Column NAK realization.
Rajesh Bhatt — Analyst
Thank you.
Rupesh Mehta — Chairman and Managing Director
Thank you.
Rajesh Bhatt — Analyst
I’ll come back in the queue.
operator
Yeah. Thank you.
operator
Rajesh, we’ll take the next question from Bhar. Please go ahead.
Unidentified Participant
Yeah. Good afternoon sir. And thank you for the. Thank. Thank you for the opportunity.[Foreign Speech]
Rupesh Mehta — Chairman and Managing Director
[Foreign Speech] Maybe we will receive but execution also all time.[Foreign Speech]
Unidentified Participant
[Foreign Speech] quarter on quarter [Foreign Speech]
Rupesh Mehta — Chairman and Managing Director
[Foreign Speech] June last year.
Unidentified Participant
[Foreign Speech] 7% growth
Rupesh Mehta — Chairman and Managing Director
tender business new order with new order.
Unidentified Participant
Okay.
Unidentified Participant
[Foreign Speech] 22%. Year on year 22 quarter order received 22%.
Rupesh Mehta — Chairman and Managing Director
I think Bhargo. Actually this is 7% which you are saying. It is on from Q4FY25 till Q1FY26.
Unidentified Participant
I’m referring to the new orders order inflow.
Rupesh Mehta — Chairman and Managing Director
New orders year on year it has grown 22%.
Unidentified Participant
No, no, no, no. It has grown 7%. So thinking I’ll take it.
Rupesh Mehta — Chairman and Managing Director
200 last year we have a order book of 200. Last year
Unidentified Speaker
283 crore.
Rupesh Mehta — Chairman and Managing Director
283 crore on quarter one result and right now we have a three hundred and forty six.
Unidentified Participant
No sir. I am referring to the private order.
Unidentified Participant
Received and the government order received in the quarter.
Unidentified Participant
If you look at so private order.
Unidentified Participant
Received were about 74 crores.
Unidentified Participant
And government order received was about 1 crore. 75 crores so I was referring to that number.
Rupesh Mehta — Chairman and Managing Director
Okay, I’ll go through that and
Unidentified Participant
sure, sure.
Unidentified Participant
And lastly sir, any update on the.
Unidentified Participant
BIS in the cnc?
Rupesh Mehta — Chairman and Managing Director
They extended for one year.
Unidentified Participant
It has been extended.
Rupesh Mehta — Chairman and Managing Director
[Foreign Speech] So process maybe Indian machine tools or BS Educate or import job [Foreign Speech] .
Unidentified Participant
Lastly sir, Germany exhibition.
Unidentified Participant
Is it for taking export orders or.
Unidentified Participant
To showcase our capability
Rupesh Mehta — Chairman and Managing Director
[Foreign Speech] or visualization.
Unidentified Participant
Great sir, thank you very much and all the very best. Thank you.
operator
Thank you. We’ll take the next question from Samil Shah. Please go ahead.
Unidentified Participant
Yeah.
Unidentified Participant
Hi sir. Good afternoon. We have an order book of 346crores as of 30th of June. So by when we can fully execute this order book.
Rupesh Mehta — Chairman and Managing Director
Normally some of the most of the client is applied for the loans because of government scheme. They can get the 15% to 25% capital subsidy plus 7% interest subsidy. So their loan process is little bit three to four months or maybe it is five to six months. But maybe this order book will complete in this financial year.
Unidentified Participant
Okay.
Unidentified Participant
Because I think in our presentation we have mentioned that typical execution cycle is four to six months.
Rupesh Mehta — Chairman and Managing Director
Yeah. Yeah.
Rupesh Mehta — Chairman and Managing Director
So definitely this order book definitely will complete in this financial.
Unidentified Participant
Okay.
Unidentified Participant
And plus we have other 3/4 as well. So we’ll be booking some orders and that would be executed also in this year.
Rupesh Mehta — Chairman and Managing Director
All together. All together. Because some of the customer loan may be delayed. Some of the customer construction may be delayed. Some of the customer have a power issues. So some of the order may be forwarded for the quarter one quarter two. But whatever the order is forwarded that is the trend that every month. Some of the order is every quarter. Some of the order is forwarded for next quarter. Next quarter is forwarded to third quarter. But definitely will match this total figure to execute this financial year.
Unidentified Participant
Okay.
Unidentified Participant
So in that case our revenues can grow in excess of 50%. If this order book is fully executed in this year remaining three quarter.
Rupesh Mehta — Chairman and Managing Director
In a broader view I am targeting 300 to 350 in between that.
Unidentified Participant
Okay.
Unidentified Participant
Because we’ve already done 61 crores in first quarter.
Rupesh Mehta — Chairman and Managing Director
Yeah.
Unidentified Participant
If you are saying 346 crore will be executed so it should cross 400 crores.
Rupesh Mehta — Chairman and Managing Director
This. No, not. Not that much because of the some of the complicated machines, some of the inventory, some the plant capacity utilization. All together this year we are targeting 300 to 350 in between.
Unidentified Participant
Okay. Okay.
Unidentified Participant
And at what EBITDA margins? Because our EBITDA margins are fluctuating every quarter. I think this year, this quarter it was 13%. Last quarter was 18%.
Rupesh Mehta — Chairman and Managing Director
No. Once no, last Q4 I think 18.
Unidentified Participant
Yeah, yeah.
Unidentified Participant
Yes.
Rupesh Mehta — Chairman and Managing Director
So it is Somil by very on quarter. On quarter because once your top line is higher your EBITDA margin because we have a 90% cost is fixed cost EBITDA margin top line or quarter one machine tool scale as I mentioned total business quarter two purchase person same quarter, same last quarter, 30, 35% first quarter is always like this in capital goods industries. Second quarter and third quarter top line.
Unidentified Participant
Right.
Unidentified Participant
So 20 25% jump over at top line. So this year can we expect EBITDA margins to be around 18% range?
Rupesh Mehta — Chairman and Managing Director
Yeah, we are trying to mention EBITDA margin. 18% in this financial year.
Unidentified Participant
Okay.
Unidentified Participant
Okay.
Unidentified Participant
And so my final question out of the total order book, how much is it from the defense sector?
Rupesh Mehta — Chairman and Managing Director
Ah, defense sector behavior right now. Order received L1 I am not calculating because in L1 also sometimes they have a budget issue they can retainer also. So L1 if I am not considering out of all this order book we have a 6 to 7% is from the tenor business.
Unidentified Participant
Okay.
Unidentified Participant
So around 20, 25 crores.
Rupesh Mehta — Chairman and Managing Director
6 to 7% right now we received already.
Unidentified Participant
Okay, okay, okay.
Unidentified Participant
So that’s it from my side. Thank you and all the best.
operator
Thank you so much. We’ll take the next question from Miten Shah. Please go ahead.
Unidentified Participant
Yeah.
Unidentified Participant
Thank you for giving me opportunity. So my question is out of the total sales, how much percentage the exports contribute? As of now?
Rupesh Mehta — Chairman and Managing Director
As of now, Right now, as of now we are not focusing on export. Almost last financial year, last quarter we don’t have any export because we not entertain the export business. But slowly in quarter two we are focusing on the some of the direct land in Middle East, UAE particularly. And after IMO we will start focusing on the export business. Right now we are not that much focused on export business because of our robust order book in domestic market and tender bidding in the defense sector.
Unidentified Participant
Okay, okay, got it. So, so my, my next question would be like, you know, how do we differentiate ourselves, you know with the likes of say Got CNC or Lokesh machines and what is our differentiating factor with respect to these companies?
Rupesh Mehta — Chairman and Managing Director
I think we all are in the same. We are 6 to 7 player who have a market share of 85 to 90%. We all are in same product, same basket.
Unidentified Participant
Okay. Okay. So it’s like what you’re thinking. Everyone gets a pie of it.
Unidentified Participant
It’s
Rupesh Mehta — Chairman and Managing Director
yeah. We all have the same product basket, same distribution network, same pattern, same working method.
Unidentified Participant
So that’s what I was asking, do we have any differentiating factor with respect to these companies. Any technical differentiation or commercial differentiation advantage with respect to these companies
Rupesh Mehta — Chairman and Managing Director
I’m not.
Rupesh Mehta — Chairman and Managing Director
Studied that much but I think whatever the other competitor have from the India or peers company have a Mac Power, have all the baskets, all the distribution network.
Unidentified Participant
Okay. Okay. Yeah thanks. Thanks a lot. Thanks and I wish you all the best. Thank you for the opportunity.
Rupesh Mehta — Chairman and Managing Director
Thank you.
operator
Thank you. Mithin, we’ll take the next question from Arpit Agarwal. Please go ahead.
Arpit Agarwal — Analyst
Yeah, thank you for the opportunity.
Arpit Agarwal — Analyst
Sir, a couple of questions.
Arpit Agarwal — Analyst
So first what was the percentage of.
Arpit Agarwal — Analyst
Nexa machines in our sales for Q1.
Arpit Agarwal — Analyst
And accordingly the closing order book how much is Nexa vertical machines? And so second we have mentioned a system called as the Mac Etrol. So is it the CNC controller replacing Fanuc and Siemens or is it a different component that we’re using our machines now?
Rupesh Mehta — Chairman and Managing Director
So it is the I think same system as Panuk and Siemens is manufacturing and I think with our brand we are purchasing from the third party and we are promoting this system as a Magpower name. Matrol is the Mag Power name and some of the Taiwanese company is supplying us with the MagPower brand name Mead 27%.
So in quarter one the contribution of Nexa is 27%. Right.
Arpit Agarwal — Analyst
One more question from my side that was Kush. So one thing which we want to understand that as the defense and the tender business grows so how would be the working capital? You know because we have. We have looked at various businesses where the government business has a slightly higher working capital.
Rupesh Mehta — Chairman and Managing Director
Working capital other[Foreign Speech] .
operator
I think there is some disturbance. Sorry AR there is some disturbance at your end. Yes sir. Please go.
Arpit Agarwal — Analyst
Yeah sorry.
Rupesh Mehta — Chairman and Managing Director
[Foreign Speech] ABAs working capital plus bank guarantee plus LC30
Arpit Agarwal — Analyst
That will go toward 150 days 140 days[Foreign Speech] expectation.
Rupesh Mehta — Chairman and Managing Director
Working days manage 130 [Foreign Speech] so it may increase by 130 to 135.
Arpit Agarwal — Analyst
So one more question. This order book is executable in about six months so and obviously we are getting more orders top line target conservative. Because
Rupesh Mehta — Chairman and Managing Director
It is last year April Last year [Foreign Speech]
Arpit Agarwal — Analyst
In this last 25 minutes.
operator
Please rejoin the queue. We’ll take the next question from Anuj K. Please go ahead.
Unidentified Participant
Good afternoon, sir. Just a couple of questions on the margin side. Sir[Foreign Speech].
Rupesh Mehta — Chairman and Managing Director
26%.
Unidentified Participant
Okay.
Unidentified Participant
Comparison may better.
Unidentified Participant
Quarter. First quarter may[Foreign Speech] come up. Quarter four may they can get.
Unidentified Speaker
So I’ll just tell you. The gross margin for this quarter is 38.5% versus last year Q1. 37.3%.
Unidentified Participant
Okay.
Unidentified Speaker
And slightly higher than Q4 which was 38.3%.
Unidentified Participant
38.3%. Right. Yeah. Okay. And so affecting factors.
Unidentified Participant
Affecting.
Unidentified Participant
Affecting this would be performance improvement.
Unidentified Participant
Your process redesign year material cost.
Unidentified Speaker
Higher gross margin. I think it is more. Higher value added machines. Higher value machines.
Unidentified Participant
Or. Or quarter on quarter by the ramp. Q4 versus Q or. Yeah.
Unidentified Speaker
Quarter Q1 versus Q1 versus Q1. Sir. Gross margin improve.
Rupesh Mehta — Chairman and Managing Director
Gross margin improvement. Ectopna job.[Foreign Speech] Or which next time maybe. But machine execute. So product basket case up say margins. Very rare.
Unidentified Participant
Okay. Got it. And out of the total expenses sales and marketing expense.
Unidentified Participant
Out of the total expenses, sales and marketing expense.
Rupesh Mehta — Chairman and Managing Director
So we can take this offline later on[Foreign Speech].
Unidentified Participant
No problem, sir. That is okay.
Unidentified Participant
Thank you.
operator
We’ll take the next question from Gaurav Chandra, please go ahead.
Unidentified Participant
Congratulations on your quarter. Thank you. Thank you. Best case scenario 90 utilization. At some point the maximum revenue generate is current capacity utilization 85%.[Foreign Speech] Thank you.
Rupesh Mehta — Chairman and Managing Director
Thank you.
operator
Thank you. We’ll take the next question from Karthik Bhar. Please go ahead.
Unidentified Participant
Yeah. Most of my questions have been answered. There’s one slide that you’ve put up on opportunities in defense and aerospace sector. So Ismay, other than aerospace and defense naval warships is also one part actually. So are we in participating. Are we participating in naval warship projects or contributing these five axis machines and naval warships as well? Because I believe these five axis machines have applications in warships. So this is another major focus area for the government going forward. And can this also give us some good or good orders in the future?
Rupesh Mehta — Chairman and Managing Director
Sometimes Karthikwe, I would like to tell you about the order from the naval industries. We already executed one project for the Moscow dockyard. And right now we submitted the our bid for the Cochin shipping yard. So we are also participating in this sector also. So naval is also these defense factories also. And BSF also. And Indian air force also. Now they are purchasing the machines for their captive utilization. BSF have a now separate budget. They can utilize this budget to manufacture the guns for their captive use. So we are participating in the all the defense sector even in PSE also Bhel we completed many project last year.
So right now we are focusing on direct indirect defense customer. Also one of our good client for the bomb cell manufacturer. We supplied the machine to the one customer who is supplying the bombshell to the defense sector. So directly whatever the defense sector we are discussing is the direct business from the defense. But indirectly our lots of client is increasing their business with the defense. And they are our happy client. So every month few machines we are supplying to the our defense client. They are manufacturing their product for the defense sector. Right now we are working with the big corporate in India for the bomb cells.
So we are participating in all the area. Naval to BSF to everyone.
Unidentified Participant
Okay.
Unidentified Participant
Okay.
Unidentified Participant
That’s a great P.I. sir. That’s it. Thank you so much. And all the best for the coming quarters.
operator
Thank you. Nitin. We’ll take the follow up questions from Rajesh. Please go ahead.
Unidentified Participant
We can do up to about you know 450 quarter worth of revenue if you utilize our capacity fully. But our guidance is kind of only 300 to 350 crore in that range.
Rupesh Mehta — Chairman and Managing Director
So I can. I can manufacture the machines. But if payment will not come or some of the order is fill over. Because the machine is not completed in normally In March after 15 defense people will not come for the inspection. Because their cycles is for 10 to 15 days to inspect and to get the training for this kind of machines. So 6070 Karodka inventory 150 machines. Standard machines realization revenue may generate 80 85% utilized quarter to quarter or next year[Foreign Speech].
Last month machine schools execute[Foreign Speech]. c
Unidentified Participant
Thank you. Thank you.
Unidentified Participant
[Foreign Speech].Rupees.
Unidentified Participant
All the rest.
operator
Thank you. Rajesh. We’ll take the next question from Aniped Jain. Please go ahead.
Unidentified Participant
Hi sir. I have two questions. One is one of your competitors very bullish on the EMS sector. So are you seeing those opportunities for yourself as well? That is number one. And number two I wanted to ask is what is the split between direct sales and distributor related sales. So how much of the sales you are getting directly and how much you are getting through distributors. So these are the two questions
Rupesh Mehta — Chairman and Managing Director
I think from the distributor we are getting the business less than 10%. So it is not a more than double digit. Directly we are getting more than 90%.
Second question is EMS sector. We developed the machine for EMS sector. But right now we are not focusing on the EMS sector.
Unidentified Participant
Understood sir. Thank you so much.
operator
Thank you. We’ll take the next question from Niten Shah. Please go ahead.
Unidentified Participant
Thank you for giving the opportunity once again. So my question is that as of now when we speak, you know our market share stands at 4% basically right. So where do we stand? Like you said there are total six to seven players, you know who are competing in India basically said 4%. What would be our number? Like are we third, fourth or fifth?
Rupesh Mehta — Chairman and Managing Director
I think we are seven people. Their market share is 85 to 90%. Rest of the people are unorganized or small players. So out of these seven we are in the, I think according to the balance sheet or according to the product basket we are in top five.
Unidentified Participant
Okay, so is there any target, you know to, to increase this market share? And, and how do we, do we have any plan, you know to proceed ahead?
Unidentified Participant
Say in fact
Rupesh Mehta — Chairman and Managing Director
already we already implemented in last year our distribution network is increased to 39 cities. Our sales and service course is almost double. 234. 234. So last year we have 120 people. So we are working on to increase our market share and some of the product basket which we don’t have. We already added in last year and every quarter we are adding the new new products. So definitely we are aggressively focusing on to get the more market shares correct.
Unidentified Participant
Is it fair to say that Jyoti CNC happens to be the largest organized player or is there any one?
Rupesh Mehta — Chairman and Managing Director
I think according to my knowledge the Bangalore based one company is the largest base in terms of the top line. Oh okay.
Unidentified Participant
Okay, that’s it. That. Thanks. Thanks a lot once again for giving the opportunity and we really appreciate answers. Wish you all the best.
Rupesh Mehta — Chairman and Managing Director
Thank you. Thank you Mithin. I would now request Arpit Agarwal to ask his follow up question. Arpit.
Arpit Agarwal — Analyst
Sir, just wanted to check on the. Because you have mentioned in the comments that you know the JV partner, you have shown the land. So just wanted to check if you can get some sense on when are we planning to sign up on the technology partner. Because you had been mentioning about that.
Rupesh Mehta — Chairman and Managing Director
Oh there is. I’m. I’m just giving the idea about the process rpg. We already done a few meetings and tomorrow also we have a one meeting with the one new partners and we are visiting the Germany where all the machine Tools Player World top 150200 player will be participating in the Emo exhibition with their machines and with their top management and their team. So this is the opportunity where we have some introduction meeting. Except this online thing we already done with the two, three people. New people also will meet over there. After that there is a process.
And we need the JV partner not before December. So rest of the thing is process. We may sign the agreement. But the implementation will be start from the new project.
Arpit Agarwal — Analyst
Sure, sir. And sir, like you mentioned that the land allocation you’re looking at a 50 acre land. Which probably should happen in the second half. So post that the plant expansion will take what? About one year roughly.
Rupesh Mehta — Chairman and Managing Director
First phase. First phase will target that with the turnkey project contract finish after receiving all the formalities for the land acquisition and fund arrangement. Will target within one year will start the operation.
Arpit Agarwal — Analyst
Thank you. That’s it for me.
Arpit Agarwal — Analyst
Thank you. Thank you.
Rupesh Mehta — Chairman and Managing Director
Thank you. Arpit sir, since that that was the last question. Would you like to give any closing comments?
Rupesh Mehta — Chairman and Managing Director
So first of all, Motion bag. Thank you very much for your beautiful presentation. I think I already appreciate to Vinay also very good presentations. And thank you very much. Team captified to arrange the meeting. And thank you very much everyone to spending some time for the Magpower. And over to the Vinay.
operator
Thank you. Thank you to the management. And thank you to all the participants for joining on this call. This brings us to the end of this conference call. Thank you.
operator
The recording has stopped.