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Undiscovered Stock | Market Cap < 200 Cr | Best Proxy Play to Manufacturing Sector | Sales/Profit Growth (5Y): 12% & 65% | Trusted, Efficient, Committed & Visionary Management.

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Undiscovered Stock | Market Cap < 200 Cr | Best Proxy Play to Manufacturing Sector | Sales/Profit Growth (5Y): 12% & 65% | Trusted, Efficient, Committed & Visionary Management.

Mentoring Pick (Micro Cap Multibagger Stock Idea) of Aug'21 : Macpower CNC Machines Ltd (NSE: MACPOWER) - Report made public today!!!

3C Capitals
Sep 20, 2022
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Undiscovered Stock | Market Cap < 200 Cr | Best Proxy Play to Manufacturing Sector | Sales/Profit Growth (5Y): 12% & 65% | Trusted, Efficient, Committed & Visionary Management.

3ccapitals.substack.com

Note: Macpower CNC stock idea was published in Aug’21@ Rs 162 per share, as on today it is trading around Rs 338 (Up 100%) to all our PAID subscribers of Mentoring Program where we identify 12 best-in-class micro-cap multibagger stocks in a year. Today we are making this report public for the benefit of all those clients who wish to join us. This is a niche business run by honest & ethical management, there is long runway of growth left for this company. It’s buy & forget for next 3-5 years with 5-6x upside from CMP. To join WhatsApp to +91 9354179604 (Sanjay Gupta)

Thanks for reading "One Page Per Day" by 3C Capitals! Subscribe for free to receive new posts and support my work.

Below mentioned write-up was shared with the clients in Aug’21…

🌟🌟🌟 Macpower CNC Machines Ltd (NSE: MACPOWER) 🌟🌟🌟

πŸ“’πŸ“’πŸ“’ Mentoring Pick (Micro Cap Multibagger Stock Idea) of Aug'21 : Macpower CNC Machines Ltd (NSE: MACPOWER)

πŸ†πŸ†πŸ† Undiscovered Stock | Market Cap < 200 Cr | Best Proxy Play to Manufacturing Sector | Sales/Profit Growth (5Y): 12% & 65% | Trusted, Efficient, Committed & Visionary Management.

πŸ“Œ Total market size of CNC machines in India is around – Rs 23,500 Cr, India produces Rs 11,500 Cr worth of machines and 55-60% imported.

πŸ“Œ Only 8 to 9 prominent players (E.g. ACE Micromatic, Bharat Fritz Werner, HMT Machine Tools, Jyoti CNC Automation, Macpower CNC, Lokesh Machines etc.) in the CNC manufacturing business enjoy ~70% of the total market share.

πŸ“Œ Few listed peers are HMT Ltd, ITL Industries, Marshall Machines, Lokesh Machines & Macpower CNC Machines. Considering the financial stability & strength of the balance sheet, Macpower CNC seems to be the clear winner than its peers.

βœ… Know more about Macpower CNC Machines Ltd βœ…

πŸ“Œ Macpower CNC Machines Ltd (www.macpowercnc.com) was established in 2003 and is engaged in the manufacture of Computerized Numerical Controlled (CNC) machines.

πŸ“Œ Listed in 2018 at NSE SME Exchange (IPO at Rs 140 per share) and proceeds of the issue were used to backward integrate into the manufacture of Machining components.

πŸ“Œ Company is looking to further backward integrate, using internal accruals, to develop state of the art patterns for different machine models.

πŸ“Œ It is also looking to make casting in house through a new foundry, which will lead to cost reduction, further quality improvement, productivity and help increase overall production.

πŸ“Œ Macpower currently has the widest range of machines offering 9 product categories, with 27 versions and 60+ different models servicing more than 27 industry segments.

πŸ“Œ The company today has a capacity to manufacture 1000-1200 machines per annum, and is further debottlenecking to manufacture 1300-1400 machines per annum.

πŸ“Œ Around 580 qualified engineers workforce, 115 working across 37 cities under sales & services.

πŸ“Œ Launched a separate vertical called β€œNEXA” for the import substitution of high end premium products such as HMC, VTL etc. which have already been developed by their R&D Team.

βœ… Watch Videos of Macpower CNC Machines βœ…

πŸ“Œ IPO Project Completion Video - www.youtube.com/watch?v=Q9KPpQDXKwg

πŸ“Œ Corporate Video of Macpower CNC Machines Limited - www.youtube.com/watch?v=dpXq3t_gfg4

πŸ“Œ Macpower CNC Machines Ltd (2021-06-30) Q4FY21 Conf Call - www.youtube.com/watch?v=Km6mUVv22PA

βœ… FY20 & FY21 - Worst period for Manufacturers of CNC Machines; But Expect FY22 & FY23 to be the BEST years ahead. βœ…

πŸ“Œ In FY20, there was a sharp decline of about 50% in the demand for CNC machines & FY21 was impacted by Covid-19.

πŸ“Œ During FY21 (Covid-19 year) they manufactured ~ 650 CNC machines. In fact they have capacity to produce double the FY21 numbers (~1200 Machines).

πŸ“Œ Revenue growth for Q4FY21 has been the highest ever. This is in spite of the challenges faced due to (national) lock-down at the beginning of FY21 and (state wise) lock-downs towards the end of FY21.

πŸ“Œ They are planning for the next leg of growth, which will allow them to grow at +25% CAGR over the next 5 years.

πŸ“Œ Operations continue to be low cost, lean and working capital efficient (debt/equity is NIL)

πŸ“Œ They are currently operating at 75% of capacity utilization, and gradually increasing their capacity at a higher rate quarter on quarter.

βœ… Expect ~200% growth in sales & ~400% growth in net profit during next 3 years due to capex & margin expansion. βœ…

πŸ“Œ Fixed assets increased from 6Cr in 2019 to 38Cr in 2021, a jump of ~ 500% in the last 2 years. The company has shown tremendous growth in output, they have doubled their capacity to 1200 machines from 600 machines.

πŸ“Œ Capacity doubled (completed) through backward integration & in house manufacturing. Because of the expansion, operating margins are expected to rise by 5% to 6% at the same level of output.

πŸ“Œ FY21 Sales was 113Cr, NP 6Cr & EPS 6.03; during FY22 if they are able to deliver 900+ CNC Machines they can do sales ~200 Cr, due to increase in operating margin by 5-6bps, net profit will be around 15-20Cr hence EPS 15-20.

πŸ“Œ FY22 expected EPS of 15-20 with average PE of 20-25, we can expect stock price ~ 300-500 in next 12 months.

πŸ“Œ Asset turnover for the company currently stands at 3x and can go up to 5x in the current plant.

πŸ“Œ They get an advance payment on the orders and get their remaining payments before the delivery of the machines. Continuous flow of order book month on month.

πŸ“Œ Big boost in EPS growth & PE re-rating will push stock price up by 500% in next 3 years.

πŸ“Œ Zero Debt; Avg. PE ~ 12/14; PEG ratio < 0.5%; After 2 years of sectoral downtrend, now is the best time for this company.

βœ… High Promoter holding (Skin in the Game) + Descent FII/DII holding in this tiny company of Mcap < 200 Cr βœ…

πŸ“Œ Promoter holding increased by 3.1% from 69.5% in Sep'18 to 72.6% in Jun'21. FII holds 6.9% & DII holds 4.1% while Public holds 16.4%.

πŸ“Œ Vantage Equity Fund (Fund manager Kenneth Andrade of Old Bridge Capital Management) holds 5.9% (Source AR 19-20)

πŸ“Œ FII (Massachusetts Institute Of Technology ~6%; Roha Emerging Companies Fund ~2.11% & Micro Strategies Fund ~2%) holds 6.92%

πŸ“Œ Reputed investors & institutions are already endorsing this micro cap stock, it shows credibility of management & sustainability of business.

🌟🌟🌟 "Capacity Expansion + Backward Integration" - Long runway of growth for this company where operating leverage will play out. This opportunity you should not miss out. πŸ‘πŸ‘πŸ‘

Download the detailed research report…

Macpower Cnc Machine Mentoring Stock Idea Aug 2021 3c Capitals
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Undiscovered Stock | Market Cap < 200 Cr | Best Proxy Play to Manufacturing Sector | Sales/Profit Growth (5Y): 12% & 65% | Trusted, Efficient, Committed & Visionary Management.

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