Ace investor Madhusudan Kela’s Windsor Machines investment has become the talk of the market. With a 7.71% stake in the company, Kela’s bet has yielded over 350% returns in just a year—a standout performance even in an otherwise flat small-cap environment. But behind the multibagger story lies a complex financial picture that deserves a closer look.

Madhusudan Kela Windsor Machines Bet: A Multibagger in Numbers

Madhusudan Kela added several small-cap stocks to his ₹3,500 crore portfolio in Q4 FY24-25, but the largest and most rewarding has been Windsor Machines. Since May 2024, the stock has surged by more than 350%, while over the last five years, it has delivered a jaw-dropping 3,000% return.

By comparison, the broader small-cap index remained flat during the same period, making Windsor a clear outlier in performance. But is this rapid rise the result of fundamental strength or just market momentum?

Company Overview: Small Cap, Big Ambitions

Windsor Machines, founded in 1963, specializes in manufacturing plastic processing machinery. The company’s product portfolio includes:

• Injection moulding machines

• Pipe and blown film extrusion systems

• Customized solutions for packaging, automotive, healthcare, and consumer sectors

With three manufacturing facilities in Gujarat and Maharashtra and a presence in 65 countries, Windsor has positioned itself well within the industrial machinery sector. The company also boasts strategic partnerships, including one with Kuhne GmbH (Germany) and an acquisition of Italy’s Italtech, helping it maintain an edge in cost-effective and technologically advanced manufacturing.

Industry Tailwinds: Favorable Policy and Geography

Windsor operates in a sector well-aligned with current government priorities. India’s infrastructure boost and “Make in India” campaign provide significant demand levers for industrial machinery.

Geographically, nearly 50% of plastic machinery demand comes from western India—an advantage Windsor leverages, thanks to its Ahmedabad HQ and operational hubs in Gujarat and Maharashtra.

Key Acquisition: Global CNC — A Game Changer?

In late 2024, Windsor announced a Rs 343 crore acquisition of Global CNC, a company specializing in:

• Computer Numerical Controlled (CNC) machines

• Vertical Machining Centers (VMC)

• Special Purpose Machines (SPM)

This move aims to help Windsor expand into new verticals like oil & gas and railways, while strengthening its precision engineering capabilities.

Global CNC brings Rs 162 crore in annual revenues and a strong client base—expected to provide Windsor with synergistic growth. The stock even hit an upper circuit post-announcement, showing investor optimism.

Funding the Growth: Dilution and Capital Raises

To finance these expansion plans, Windsor is raising Rs 225 crore via preferential allotment, with Rs 125 crorecoming directly from Madhusudan Kela. Additionally, a Rs 500 crore warrant issuance has been announced.

This capital infusion should provide the financial muscle needed for scaling up, but it also means equity dilution for existing shareholders. The success of these investments will determine whether the dilution proves profitable in the long term.

Red Flags: Financial Missteps and Subsidiary Woes

Despite strong revenue numbers and bullish investor sentiment, Windsor’s financial history is far from spotless:

🟥 Inter-Corporate Loans

The company issued inter-corporate loans totaling Rs 59 crore. Due to poor recoverability, it had to waive off Rs 54 crore in interest, with Rs 43 crore still outstanding as of early 2025.

🟥 Subsidiary Liquidations

• Wintal Machines (Italy) has entered voluntary liquidation.

• RCube Energy Storage Systems saw its net worth crash from Rs 19 crore to just Rs 47 lakh due to project failure.

These losses severely impacted Windsor’s consolidated financials, wiping out the profits made in core segments like injection moulding.

🟥 Exceptional Items and Tax Burden

Windsor reported Rs 246 crore in revenue and Rs 5.68 crore in PBT (excluding exceptional items) for the 9-month period ending December 2024. However, tax liabilities and one-off losses dragged net profits into negative territory—a net loss of Rs 16.58 crore.

Valuation Concerns: Bubble or Justified Premium?

The stock is currently trading at a P/E of 789—an extraordinary multiple, especially for a company with:

• Inconsistent profitability

• High dependence on a single business vertical (injection moulding = 58% of revenue)

• History of questionable investment decisions

If you factor in consolidated operating profits, the P/E becomes negative. This suggests that the market is pricing in future growth very aggressively, despite the financial instability.

Balance Sheet Improvements: A Silver Lining

On a more positive note, Windsor has significantly reduced its debt from Rs 208 crore (Mar 2024) to Rs 10 crore (Dec 2024). This deleveraging is commendable and positions the company better to absorb future shocks, provided new investments perform as expected.

Risks to Watch: Not Just a Growth Story

1. Execution Risk: Can the Global CNC acquisition deliver actual revenue and margin expansion?

2. Fund Utilization: Will newly raised funds be deployed wisely?

3. Operational Focus: Over-diversification may dilute management attention from core profitable segments.

4. Market Valuation: The stock may be overvalued relative to earnings, leaving little margin for error.

5. Q4 Earnings Watch: Scheduled to be released next week, Q4 results could be a key inflection point.

Bottom Line: Multibagger or Mirage?

The Madhusudan Kela Windsor Machines bet is a fascinating case of potential vs risk. While the multibagger returns and business expansion efforts are impressive, the company’s mixed financial history, high valuation, and recent missteps cannot be ignored.

✅ Suitable for:

• High-risk, long-term investors

• Those who believe in turnaround stories

• Investors tracking institutional moves like those of Madhusudan Kela

❌ Caution for:

• Conservative investors

• Those relying on near-term profitability

• Buyers seeking value-based metrics

As always, this article is for educational purposes only and not financial advice. If you’re considering investing, consult your SEBI-registered advisor before making a decision.