Craftsman Automation Ltd

- The company plans future fundraising primarily through debt to fund investments. - Current net debt to EBITDA is around 2.43; the company expects this to reduce below 2 in the current year and further to 1.5 naturally over time. - Future capex and borrowing are considered necessary to stay competitive, especially due to rising capex costs. - No clear indication of equity fundraising in the near term was mentioned. - Capex for FY 2027 is yet to be finalized (decision expected by September), with monitoring of net debt to EBITDA guiding debt levels. - The focus is on prudent debt leveraging to fund growth rather than immediate deleveraging. - Land sale proceeds (e.g., Gurgaon land) are expected to reduce consolidated debt from INR3,300 crore to about INR2,700 crore. - So, debt will be used strategically for investments, and there is an emphasis on managing debt metrics rather than aggressive repayment at this stage.

- Capex in FY 2027 is still undecided, with a review planned in September based on order intake. - Future capex will be managed prudently due to high costs of land and construction; example: DR Axion’s greenfield land cost around INR 150 crore. - Investments continue in aluminum business expansion, including merging entities (Sunbeam, DR Axion, Craftsman) for synergy and scale. - Powertrain segment capex ongoing, with a planned Phase 2 decision by September; incremental investments at foundry and machining sites. - Expansion of alloy wheel capacity on hold; decision on further expansion expected after the financial year. - Focus on operational efficiency and manpower cost optimization through automation and process improvements. - Decreasing capacity at Sunbeam to optimize product/customer base and improve margins.

- Craftsman Automation expects double-digit revenue growth, likely in the mid-teens, for FY 2027, assuming aluminum prices remain stable. - Powertrain segment is projected to reach $100 million in revenue by FY 2029-30, with strong order books and potential for Phase 2 expansion. - Aluminum business is likely to reach $1 billion in 2-3 years, sensitive to aluminum prices, with margin improvements expected once capex slows down. - Alloy wheel capacity utilization is expected to grow from current ~3 million to about 4 million units next year (70-80% utilization). - The new powertrain business has low current capacity utilization but anticipates meaningful growth by FY 2029-30. - Business growth is supported by new projects kicking in across all divisions, including industrial engineering. - Strategic consolidation of aluminum entities aims to improve operational efficiency and support larger business scale.

- The company expects mid-teen percentage revenue growth in FY 2027, assuming stable aluminum prices. - Powertrain segment is on track for double-digit growth, with a $100 million revenue target by FY 2029-30. - Aluminum business margin improvement may take 2-3 years, with significant capex currently impacting margins. - Consolidation of aluminum entities (Sunbeam, DR Axion) aims to improve operational efficiency and win larger orders, driving future margin and profit improvements. - Margin expansion in aluminum business is tied to slowing capex growth after scaling to ~$1 billion revenue, expected in 2-3 years. - Operating efficiencies and manpower rationalization are ongoing to mitigate inflationary pressures on costs. - Overall, earnings growth is expected to improve gradually post-capex cycle, supported by scale and better pricing.

- The powertrain segment has an order book finalized for the first $100 million, on track to be achieved by FY 2029-30. - The inquiry momentum for the second phase of powertrain expansion is strong, indicating potential further growth beyond $100 million revenue. - DR Axion has received more orders from existing customers and additional Indian OEMs, leading to capacity expansion. - Alloy wheel business maintains strong current run rate (~3 million units annualized) with capacity utilization about 70-80%, and expected ramp-up to ~4 million units next year. - New powertrain business for large engines is at pilot/sample stage with capacity utilization around 10%, expected to gain traction by FY 2029-30. - Sunbeam is rationalizing capacity and customer base, exiting unviable legacy products; capacity utilization expected to reduce from ~70% to 45-50%. - Overall, incremental orders across businesses are strong, supporting capacity expansions and future growth.