Macpower CNC Machines Capacity Expansion, HPL Electric & Power Order And Choice International Insider Buying

Macpower CNC Machines Ltd.

Recent filing: (CAPACITY EXPANSION) Macpower is setting up a new assembly unit by constructing 40,000 Sq. Ft., increasing manufacturing capacity from 2,000 to 2,500 machines per annum by the end of FY25 and will be available to company from April, 2025 onwards. Total capex is around INR 15 Cr for capacity expansion and backward integration. Current capacity utilization is 88%.

SUMMARY: 5y Operating Profit uptrend | PE 54.2x (Sector PE range 30-60) | Capacity expansion | Orderbook INR 283 Cr (Jun-24) | Defence | Space | Capital Goods – Non Electrical equipment

FUTURE OUTLOOK: As per Q1FY25 Concall, Company aims to achieve 20-25% revenue growth over the next 5 years. As per Q4FY24 Concall Company is planning a big expansion project in FY25 with a capacity of 4000-5000 machines.

• MCap of INR 1,420 Crore (share price = INR 1,419 / share) (as on 13th Sep ‘24)
• TTM PE of 54.2x (as on 13th Sep ‘24) Retail float = 17.6% (Jun-24)

FOOD FOR THOUGHT: Cash conversion cycle is high (139 days) for FY24

Q1. What are the Products and Services offered by Macpower CNC Machines?

Established in 2003, Macpower CNC Machines is engaged in the manufacture of Computerized Numerically Controlled (CNC) machines. With 9 product categories, 27 variations and 60+ different models, the Company has the widest range of offering amongst peers. Macpower has been a key approved supplier of CNC machines to the defence sector and is associated with more than 50 companies across the defence and aerospace sectors such as ISRO, Indian Ordinance Factories, Gun and Shell Factory, HVF(Avadi), Ordinance Factory Medak, DRDO TBRL and Rifle Factory Ishapore, amongst others.

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HPL Electric & Power Ltd.

Recent filing: (ORDER) HPL Electric has received a work order worth INR 144 Cr for the supply of Smart Meters & Conventional Meters from its regular leading customers.

SUMMARY: 4y Operating Profit uptrend | 4q Operating Profit uptrend | PE 71.4x (Sector PE range 30-70) | Excellent Jun-24 results | New Products | Partnerships | Electrification | Orderbook of INR 3,700 Cr As of 30th Jun (2.4x of TTM revenue) | Smart Meter | Capital Goods - Electrical equipment

FUTURE OUTLOOK: As per Q4FY24 Concall, Company anticipates 20-25% Revenue growth in next 3-4 years and expect revenue to reach INR 1800 Cr or higher in FY25.

• MCap of INR 3,828 Crore (share price = INR 595 / share) (as on 13th Sep ‘24)
• TTM PE 71.4x (as on 13th Sep ‘24) Retail float = 20.6% (Jun-24)

FOOD FOR THOUGHT: Sales depends on Company’s ability to win tenders from PSUs. Intense competition leads to aggressive bidding, which could compromise margins. | PE is above sector range.

Q1. What are the Products and Services offered by HPL Electric & Power?

HPL is an established electric equipment manufacturing company in India, manufacturing a diverse portfolio of electric equipment, including metering solutions, switchgear, lighting equipment and wires and cables, catering to consumer and institutional customers in the electrical equipment industry. HPL had the largest market share in India's electricity energy meters market, with one of the most comprehensive portfolios of meters in India.

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Choice International Ltd.

Recent filing: (INSIDER BUYING) Vijendra Singh Shekhawat (Designated Person) bought 22k shares at INR 443/share, aggregating to INR 97 L in Sep ‘24.

SUMMARY: 6y Operating Profit uptrend | PE 66.5x (Sector PE range 30-50) | Fund Raise | Promoter buying | Institutional Entry | Geographical expansion | Strategic collaborations | Large Order | Entry into Solar via Subsidiary | Diversified Commercial Services

• Mcap of INR 9,100 Crore (share price = INR 456 / share) (as on 13th Sep '24)
• TTM PE 66.5x (as on 13th Sep '24) Retail float = 3.2% (Jun-24)

FOOD FOR THOUGHT: PE is above sector range

Q1. What are the Products and Services offered by Choice International ?

Incorporated in 1992, Choice group provides tech-led financial services. It finds its legacy in resolving financial problems and bridging gaps for individuals, institutions, and governments. It is an integrated and diversified financial services group.

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