Craftsman Automation Ltd. share price target

Craftsman’s 2QFY26 consol PAT of INR912m was ahead of our estimate of INR863m, aided by better-than-expected revenue growth, especially in the aluminum segment.

Craftsman Automation’s (CFTM) consolidated revenue grew 65% YoY to INR 20bn, 10% higher vs. I-Sec est. EBITDA margin of 15.1% in Q2FY26 (up 20bps QoQ), was largely in line with I-Sec est. of 15.0%. Margin expansion was led by operating leverage and cost optimisation.

Craftsman Automation (CRAFTSMA) reported a weak 1Q performance, as PAT of INR532m came in significantly below our est. of INR801m.

Craftsman Automation (CFTM)’s Q1FY25 EBITDA came in at INR 2bn, down 5% QoQ (vs consensus estimate of INR 2.2bn). Aluminium segment EBITM at ~13% was ~180bps lower QoQ due to rise in commodity prices.

Craftsman Automation (CFTM)’s Q4FY24 EBITDA came in at INR 2.1bn, down 6% QoQ (vs consensus estimate of INR 2.4bn).

Craftsman Automation (CRAFTSMA) reported a weak 4QFY24, largely due
to the subdued performance of the powertrain division, resulting in a lower
Revenue/PAT of INR11.1b/INR0.62b (vs. est. of INR11.9b/ INR0.86b).
However, aided by the strong order backlog in the Al and Industrial
Engineering segments, we expect the company’s performance to improve
over our forecast period.

Craftsman Automation (CFTM)’s EBITDA came in at INR 2.4bn, up 11% QoQ and in-line with consensus estimates. Powertrain (PT) segment’s margin at ~20% continued its downward march – management expects profitability to recover Q3 onwards, as repair and maintenance activities related to refurbishment are largely done.

Craftsman Automation (CFTM) is undergoing diversification to reduce CV exposure and improve RoCE by doing casting/machining of engine cylinder blocks/heads for SUV makers like Hyundai, Kia and M&M. By generating ~8% FCF/sales with ~22% RoCE, CFTM would be in a position to deliver steady fundamentals and sail through the CV downcycle in a smooth manner, in our view.

We recently interacted with Craftsman Automation’s (CAL) management to understand its business strategy and outlook. Following are the key takeaways: a) Well-diversified business catering to domestic/export PVs, CVs, 2Ws along with industrial components and storage solutions.

Q3 FY22 to 1.18 bn as the company gained new businesses in exports and also due to price hikes seen in aluminum. At EBIT levels the margins were at 4.4% v/s 6.6% qoq and 4.5% yoy. In the industrial Engineering segment, revenues moved up by 35% yoy while going down by 19% qoq to...

There has been a rapid pick up in Craftsman Automation Ltd (CAL)'s financials observed in Q2 of FY22 on both yoy and qoq basis. Revenues grew by 154% yoy on low base but by 31% qoq to 5.7 bn. Power train business expanded 60% yoy and 25.7% qoq in Q2 as CV industry has started...