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Macpower CNC Machines Ltd.

BSE: 535057 Sector: Engineering
NSE: MACPOWER ISIN Code: INE155Z01011
BSE 05:30 | 01 Jan Macpower CNC Machines Ltd
NSE 00:00 | 16 Apr 149.10 0
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Macpower CNC Machines Ltd. (MACPOWER) - Chairman Speech

Company chairman speech

FROM THE DESK OF CHAIRMAN & MANAGING DIRECTOR

Dear Shareholders

Machine tool industry can be considered backbone for fostering industrial growth acrossthe different sectors of economy since machine tool is the mother machine to manufacturevarious components across industrial sectors.

Metal cutting machine tool industry witnessed enormous growth in the FY 2017-18 withconsumption showing 28% increase and production by 26% on YOY basis the same beingobserved at MACPOWER wherein your Company's growth has been marked at 54% in FY 2017-18 onYOY basis which was the result boost in demand of various types of machines acrossdifferent sectors of industry ranging from automobiles general engineering aerospacedefence agriculture etc.

Your Company's vision is to provide the best possible solution in CNC machine toolindustry thereby unleashing value for end users. For the same Company have continuouslyadding up models in entire range of products from CNC Turning Centers VMCs to HorizontalMachining Centers Multitasking machines and Robotic Automation. Your Company hasdistribution strength and strong network presence across 31 cities with 107 sales andservice engineers 4 regional offices and 4 Technology centers on PAN India basis. YourCompany has 27 different product categories with 60 + models serving to 27 industrialsegments and delivered more than 1000 solutions.

Your Company has achieved nearly 50% growth in terms of Revenue at Rs.10694.3 Lakhs incomparison to previous year of Rs. 6918.15 Lakh and your Company has incurred profitbefore Tax of Rs. 1074.94 Lakh in comparison to previous year of Rs. 96.66 Lakh i.e.increased by 1012.01% and has incurred Profit after Tax of Rs. 704.18 Lakh in comparisonto Profit of previous year of Rs. 78.40 Lakh i.e. increased by Rs. 798.19%. This is mainlydue to approx. 50% increase in sales. Increase in production by direct final Guardingprocess adopted instead of rough and final guarding process. New Standard OperatingProcess [SOP] prepared in line with Assembly process and necessary checks put in to theSOP. Further refining of assembly process minimum material flow by eliminating non valueadded activities and making substantial changes in parts design helped to reduce thethroughput cycle time without adding machinery & resources.

Considering the strong financial Board of Directors have recommended 10% of Face Valueas final dividend for the year 2017-18.

Looking at the current scenario of Indian economy and robust growth prospects aheadwith projected growth of nearly 7.4% of GDP by leading financial institutions of theworld Company planned to undergo strategic restructuring to develop in-house capabilitiesthrough backward integration to have better process control and also increasing theproduction capacity from current 600 machines to 800 machines in FY 2018-19 by setting upadditional Machinery plant and state of the art machineries and with the same motive weentered into capital market through IPO in March 2018.

The IPO came in March 2018 with 26.15 lakh shares amounting to Rs. 36.6 Cr. which wassuccessfully oversubscribed in all the categories namely QIB NII and RII. Company'sconstant endeavor will be to achieve its aim in FY 2018-19 to focus on building in-housecapabilities and increase production capacity thereby increasing process control and bringdown production cost and leveraging profit margins.

Looking at the growth prospects for the company considering all the above mentionedfactors your Company is looking at a healthy growth rate of nearly 50% in the FY 2018-19by focusing Company's efforts on backward integration increasing production capacityreducing production cost adding newer state of the art products in the existing productline strengthening existing distribution network by expanding the horizon streamliningof production processes nurturing existing work force by imparting necessary training andupgrading their skills increasing in-house capabilities penetrating its presence in lessexplored industrial segments delivering application based solutions and thereby resultingin maintaining same growth level in FY 2018-19 on YOY basis resulting into increasedprofit margins and value addition for all the stakeholders.