Any current/future new fundraising through debt or equity?

There is no explicit mention of any current or planned new fundraising through debt or equity in the provided transcript. The company has incurred debt for the acquisition of DR Axiom India Private Limited (INR 375 crores). Debt-to-equity ratio increased to 0.72 due to acquisition financing. Management expects to reduce debt by at least INR 200 crores next year after planned INR 300 crores capex. Financial costs are projected around INR 150-160 crores on a consolidated basis. Capex guidance for FY24 includes approximately INR 30 crores for DR Axion and INR 320-330 crores for Craftsman standalo

Any current/future capex/capital investment/strategic investment?

FY ’24 capex guidance for the core Craftsman business is around INR 320-330 crores, with about INR 100 crores adding to net block (capacity expansion and modernization). Capex for DR Axion is expected to be around INR 30 crores or less, mostly for maintenance and modest capacity enhancements. Past capex (~INR 309 crores) focused on technological upgrades, addressing bottlenecks, and balancing areas. Craftsman plans to invest in semi-automation, modernization of machinery, and improved work practices to support 20% CAGR growth without increasing headcount. There is capacity expansion planned, w

Future growth expectations in sales/revenue/volumes?

Craftsman expects a robust growth runway of at least 3 years with clear visibility, targeting 20%+ growth across segments in FY 2024. Auto powertrain segment: 22%-25% top-line growth; value addition growing by about 20%-24%. Aluminium and industrial engineering segments also projected to grow 20%-25% on both top-line and value addition. Company is confident of sustained growth for 6 years, driven by India's growing manufacturing GDP share (currently ~5% vs China’s 45%). Growth driven by infrastructure expansion, rising market aspirations, and China Plus One strategy. Off-highway vehicles and d

Future growth expectations in earnings/operating earnings/profits/EPS?

Craftsman Automation has demonstrated consistent strong growth with FY23 EBITDA up 25% and PAT up 48%, aided by the new tax regime. The company targets 20% year-on-year growth in value addition across all three segments (auto powertrain, aluminium products, industrial engineering). Auto powertrain segment value addition grew 24% in FY23; aluminium 27%; industrial engineering 38%. EBITDA margins for the business are expected in the 15%-17% range in good years, with 14% as a base; DR Axion EBITDA was ~14% in FY23 with potential for improvement. Debt reduction of approximately INR 200 cro

Current/ Expected Orderbook/ Pending Orders?

Craftsman has mentioned an order win of INR 150 crores related to aluminum, expected to start in Q2. (Page 11) Stellantis order is scaling up in Q3. (Page 11) A domestic SUV manufacturer order will commence production in July; Craftsman is a second supplier for a critical part under validation. (Page 11) DR Axion has sufficient orders with capacity utilization around 80%, with a headroom for growth by another 20%-25%. (Page 14) Discussions are ongoing for DR Axion orders in passenger vehicle EV business, but details are not disclosed. (Page 14) Order pipeline looks promising; capacity increase

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Craftsman Automation LtdQ1 FY24Auto Components

Craftsman Automation Ltd Q1 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹9,284P/E: 51.3Market Cap: ₹20.2K CrSector: Auto Components

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Craftsman expects a robust growth runway of at least 3 years with clear visibility, targeting 20%+ growth across segments in FY 2024.
→Auto powertrain segment: 22%-25% top-line growth; value addition growing by about 20%-24%.
→Aluminium and industrial engineering segments also projected to grow 20%-25% on both top-line and value addition.
→Company is confident of sustained growth for 6 years, driven by India's growing manufacturing GDP share (currently ~5% vs China’s 45%).
→Growth driven by infrastructure expansion, rising market aspirations, and China Plus One strategy.
→Off-highway vehicles and diesel generator exports expected to pick up from Q3 onwards.
→Passenger vehicle and commercial vehicle segments expected to scale up from Q2-Q3, with new clients and higher tonnage trucks adding value.
→DR Axion acquisition to aid growth, targeting EBITDA margins around 15%-17% with further capacity expansion planned.

Margin guidance

Category 3

→Craftsman Automation has demonstrated consistent strong growth with FY23 EBITDA up 25% and PAT up 48%, aided by the new tax regime.
→The company targets 20% year-on-year growth in value addition across all three segments (auto powertrain, aluminium products, industrial engineering).
→Auto powertrain segment value addition grew 24% in FY23; aluminium 27%; industrial engineering 38%.
→EBITDA margins for the business are expected in the 15%-17% range in good years, with 14% as a base; DR Axion EBITDA was ~14% in FY23 with potential for improvement.
→Debt reduction of approximately INR 200 crores is expected next year, improving financial health.
→The company sees growth visibility of at least 3 years at 20% CAGR, with optimism extending to 6 years due to India's growing manufacturing footprint and market expansion.
→Capex of around INR 320-330 crores planned for FY25 to support 20%+ growth, improving ROCE over time.
→EPS showed strong growth (INR 75.94 to INR 112.53) and is expected to grow aligned with EBITDA and revenue growth.

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Fundraise plans

→There is no explicit mention of any current or planned new fundraising through debt or equity in the provided transcript.
→The company has incurred debt for the acquisition of DR Axiom India Private Limited (INR 375 crores).
→Debt-to-equity ratio increased to 0.72 due to acquisition financing.
→Management expects to reduce debt by at least INR 200 crores next year after planned INR 300 crores capex.
→Financial costs are projected around INR 150-160 crores on a consolidated basis.
→Capex guidance for FY24 includes approximately INR 30 crores for DR Axion and INR 320-330 crores for Craftsman standalone, which is planned to be funded within current resources.
→No new fundraising is indicated; focus is on debt reduction and operational investment.

Order book

Yes

→Craftsman has mentioned an order win of INR 150 crores related to aluminum, expected to start in Q2. (Page 11)
→Stellantis order is scaling up in Q3. (Page 11)
→A domestic SUV manufacturer order will commence production in July; Craftsman is a second supplier for a critical part under validation. (Page 11)
→DR Axion has sufficient orders with capacity utilization around 80%, with a headroom for growth by another 20%-25%. (Page 14)
→Discussions are ongoing for DR Axion orders in passenger vehicle EV business, but details are not disclosed. (Page 14)
→Order pipeline looks promising; capacity increases are planned to support growth. (Page 11)

Capex plans

Yes

→FY ’24 capex guidance for the core Craftsman business is around INR 320-330 crores, with about INR 100 crores adding to net block (capacity expansion and modernization).
→Capex for DR Axion is expected to be around INR 30 crores or less, mostly for maintenance and modest capacity enhancements.
→Past capex (~INR 309 crores) focused on technological upgrades, addressing bottlenecks, and balancing areas.
→Craftsman plans to invest in semi-automation, modernization of machinery, and improved work practices to support 20% CAGR growth without increasing headcount.
→There is capacity expansion planned, with DR Axion expected to increase capacity by about 10-20% by July.
→No plans for large rash decisions on big capacity additions; focus is on improving ROCE while scaling.
→Potential small backward integration if supply chain bottlenecks occur with auto-powertrain growth.

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