Macpower targets end-Q2 FY28 start for 13-acre expansion

Macpower expects its 13-acre expansion to operate by the end of Q2 FY28, while the final machine-output capacity is still being calculated. Management said the site will support debottlenecking, backward integration and 25% to 30% annual growth over the coming three years, despite current production capacity of 2,500 machines a year.

When will Macpower's 13-acre expansion begin operations?

Macpower expects the 13-acre facility to be operational by the end of Q2 FY28. Management said construction had started on the land, which comprises 9 acres plus 4 acres near the existing plant, and repeated during the call that the new capacity would come at the end of the second quarter.

The project is intended to remove bottlenecks in machining and component production rather than only add assembly space. Management said it is prioritising component manufacturing, machining, grinding and backward integration because higher machine production requires a greater supply of internally made and sourced components.

Macpower said compound work and bore work were complete, while architects and contractors had been appointed. The building contract contains a six-month completion clause with a penalty provision, and management said it was confident the facility would be used on schedule. That confidence is management's assessment, not a reported commissioning result.

How will Macpower grow before the Q2 FY28 facility opens?

Macpower said it can maintain 25% to 30% year-on-year growth before the new plant opens by using its existing site, forward inventory and operational preparation. Management said Q1 and Q2 FY28 growth would be supported by recruitment, logistics, material availability and machining work completed ahead of the expansion.

The current facility has annual capacity of 2,500 machines, or roughly 600-plus machines a quarter. An analyst estimated that Q2 FY27 deliveries were about 591 machines, based on average realisation of Rs 20.36 lakh, and management said this was broadly correct after allowing for service revenue. That comparison indicates why additional debottlenecking is central to the interim plan.

Management said Macpower could deliver 2,300 to 2,400 machines in FY27, compared with its stated 2,500-machine annual capacity. It cited forward inventory carried from Q1 into Q2, with some inventory still available, and said Q4 planning called for 250 machines a month, or 750 machines in the quarter. The planned Q4 rate is above the usual quarterly capacity of about 600 machines because of inventory and operating preparations.

Demand provides the basis for this production plan. Macpower reported a pending order book of Rs 476 crore at Q2, up 36% year on year, and a Rs 939 crore bid pipeline comprising Rs 745 crore of domestic bids and Rs 194 crore of government tender bids. The NEXA series represented almost 40% of pending orders, linking a sizeable part of the backlog to its larger-machine range.

What capacity will Macpower add at the new site?

Macpower has not disclosed the final machine-output capacity of the 13-acre site. Management said about 90% of its calculation was complete but it was still assessing capital expenditure on machine purchases, process and instrument purchases, and material-handling equipment before freezing the capacity-addition figure.

Management initially said detailed capacity information would follow the Q2 results, but later said it expected to freeze the calculation within one month and announce exact guidance in the Q3 results call. The Q3 call is therefore the more specific timetable disclosed during the question-and-answer session. Macpower reported quarterly capital expenditure of Rs 2.89 crore, while indicating that further equipment orders were being prepared.

Some longer-lead orders have already been placed. Management said about 20% of orders, with five- to six-month lead times, covered spindle capacity, sheet-metal capacity and telescopic covers. It said equipment being considered for grinding and machining had lead times of no more than three months, while delivery and logistics for other machines were estimated at about four months.

The proposed investment addresses a gap in component capacity. Management said spindle capacity was about 1,400 to 1,500 units, while the company was still purchasing about 1,500 components. It expects more in-house component production to contribute to margins after new capacity is added, although management also said salary and operating costs would rise as operations scale.

What market and land plans support Macpower's expansion?

Macpower is preparing its sales and service network for the planned capacity increase. It operates 9 branch offices and 9 technical centres, and said four additional technical centres in Kolhapur, Mumbai, Chennai and Aurangabad were under development and expected to become operational in Q3.

Management said its sales, service, technical-centre and branch teams would double by the end of FY27. It does not currently see a need to expand beyond its 39-city distribution network, which management described as covering the main industrial cities. Instead, it plans higher marketing spending, recruitment and development within that network before the additional capacity becomes available.

Macpower also said it expects benefits under the Vikshit Gujarat policy for the new capital expenditure, including a stated 25% subsidy on construction, machinery and equipment and a 7% interest subsidy. These are expected incentives cited by management, not subsidies already received. The company is separately awaiting Gujarat's defence policy before developing a 60-acre site, for which management said token money had been paid and more than 32 departmental clearances completed.

Management said the 13-acre site has priority because it provides at least three years of visibility for higher production. The 60-acre development will follow only after the smaller site is developed and the defence policy is issued. This sequencing contrasts with the immediate Q2 FY28 operating target for the 13-acre project and leaves the timing of the larger site unresolved.

Conclusion

Macpower's expansion plan combines near-term production management with a targeted end-Q2 FY28 facility start. Existing annual capacity of 2,500 machines is being supplemented by forward inventory, recruitment, component debottlenecking and equipment orders, while the Rs 476 crore pending order book, up 36% year on year, supports management's stated 25% to 30% growth ambition.

The next disclosed milestone is the Q3 results call, when management said it would provide the final capacity-addition figure after completing its calculation and placing equipment orders. Progress on the six-month construction timetable, the planned Q3 opening of four technical centres and Gujarat's pending defence policy will also determine how the 13-acre and 60-acre plans advance.