Marshall Machines Ltd Management Discussions

Challenges

The machine tool industry faces several challenges:

Economic Fluctuations: The industry is highly sensitive to global economic conditions. Economic slowdowns can reduce demand for machine tools, affecting market growth. Technological Obsolescence: Rapid technological advancements necessitate continuous innovation to stay competitive. Supply Chain Disruptions: Factors like natural disasters, political instability, and trade disputes can disrupt supply chains, impacting production timelines.

Future Outlook

Despite the challenges, the future of the machine tool industry looks promising with continuous investments in R&D, increasing adoption of automation, and expanding manufacturing activities worldwide. The industrys growth is supported by the rising demand for high-precision components and the ongoing advancements in CNC technology, ensuring its pivotal role in the global manufacturing ecosystem.

The Indian Machine Tool Industry

Industry Overview

The Indian machine tool industry is a crucial segment of the manufacturing sector, playing a pivotal role in the industrialization and economic development of the country. It provides the foundational machinery required for producing other capital goods, thus acting as a backbone for various manufacturing processes. As of 2023, the Indian machine tool industry is valued at around USD 1.5 billion and is expected to witness significant growth in the coming years, driven by increasing industrialization, advancements in technology, and government initiatives.

Market Size and Expected Growth

The Indian machine tool market is projected to grow at a compound annual growth rate (CAGR) of around 12% from 2022 to 2027. This robust growth is attributed to several factors, including the rising demand for precision manufacturing, the expansion of the automotive and aerospace sectors, and the governments push towards "Make in India" and other industrial policies aimed at boosting manufacturing capabilities.

Key Sectors Driving Growth

Government Initiatives

The Indian government has launched several initiatives to bolster the machine tool industry, including the "Make in India" campaign, which encourages domestic manufacturing and reduces reliance on imports. Additionally, the establishment of technology centers and innovation hubs, along with favorable policies for foreign direct investment (FDI), are expected to enhance the capabilities and competitiveness of the Indian machine tool industry.

Challenges and Opportunities

While the Indian machine tool industry is poised for growth, it faces challenges such as technological obsolescence, competition from international manufacturers, and the need for skilled labor. However, these challenges also present opportunities for innovation, upskilling, and collaboration with global players to adopt cutting-edge technologies and best practices.

Conclusion

The Indian machine tool industry is set to experience robust growth, driven by demand from key sectors and supportive government policies. By embracing technological advancements and fostering innovation, the industry can overcome challenges and contribute significantly to Indias manufacturing prowess and economic development.

Company Overview

Marshall Machines, founded by Mr Gautam Sarup in 1961, is a well-known brand in the Indian machine tool industry. Marshall started out by manufacturing high-precision bench lathes, heavy-duty lathes, and capstan lathes. However, in the last two decades, under the aegis of second-generation promoters Mr Gaurav Sarup and Mr Prashant Sarup, the Companys single-minded focus on product innovation, research and development, automation, and Industry 4.0 technologies has positioned it as a niche player in a somewhat commoditized industry. Resultantly, Marshall is currently a front-runner in the space of automated, Industry 4.0-enabled, and smart IoT-enabled CNC solution offerings to Indias leading manufacturing companies. Marshalls clientele is spread across numerous industries, including automobile, consumer durables & appliances, and general engineering, to name a few.

Business Overview

Marshall Machines is in the business of designing, manufacturing, and deploying solution offerings, providing after sales services for machine tool equipment. Products offered by the Company include single spindle CNC machines, innovative two spindle & four spindle CNC machines, automated robotic CNC machine solutions, and Industry 4.0 products such as SmartCorrect Gauging Stations. Since then, the Company has grown into a well-regarded player in automated solutions, smart and technologically superior machine tool offerings that enable its clients to enhance productivity, reduce cost per component, and generate a higher return on investment (ROI) from their machines. Constant product innovation, achieved via rigorous research and development, intellectual property generation and protection, has enabled the Company to produce solutions that meet the emerging needs of its clients. The Companys machines are being used in a number of industries, including the automobile industry, consumer durables and appliances, and general engineering, among others. They are used to manufacture a variety of products such as axles, crankshafts, auto components, fans, and pumps. They are also used to manufacture bearings, gear blanks, bushes, and other similar items. These machines are well-regarded for their quality, dependability, and precision performance. In addition, Marshall provides its clients with the ability to create and implement customised solutions with the desired flexibility. As a result, customers unique requirements are met with these customised solutions that are designed to maximise the efficiency with which these equipment are used in their operations.

Marshall and Maruti Center for Excellence

During the year, the Company launched a significant initiative along with Automobiles major Maruti by launching Indias 1st comprehensive Training Program for Industry 4.0 Technologies at MACE. In this initiative, Marshall has installed proprietary equipment for training on four types of machines at MACE, i.e., Vertical Machining Center, CNC Turning Center, Injection Moulding Machine, and Hydraulic Press.

The training will cover the three most important areas for machine shops Productivity, Quality and Health. In addition, through the LOPI (Learn, Observe, Practice, Implement) model, trainees will learn to implement Industry 4.0 Technologies in their respective factories.

Outlook

Post completion of the recent CAPEX cycle (2018-2021), the Company has created a cumulative capacity of 250 crores in Revenues from erstwhile 75 crores. The Company will rely on the increased deployment of Industry 4.0 and affordable automation solution offerings in order to enhance revenues and capacity utilisation. Marshall Machines has a complete gamut of product offerings that address these needs, and we will be at the forefront of addressing these problems with our meticulously developed product portfolio.

With the completion of acquisition of new Technology in the Last financial year and the coming financial year the company aims to complete their product portfolio to offer state of the art solutions to a wide range of customers and industries. The technology will give a cutting edge to Marshall specially in high growth and upcoming sectors like EV, Defence and Semi conductor manufacturing. The company aims to create import substitutes since the Indian Machine tool industry is still dependent on Import substitutes.

INSOLVENCY PROCEEDINGS

There are three insolvency proceedings pending against the Company in NCLT namely: