Craftsman Automation Ltd, an auto component manufacturer, is gearing up for a substantial capital expenditure cycle, with plans to invest a whopping ₹750–800 crore in the fiscal year 2026. This ambitious move has been confirmed by the Chairman and Managing Director, Srinivasan Ravi. Despite the ongoing geopolitical disruptions and tariff tensions, the company remains confident in its operations, expecting to navigate through the incremental tariff pressure smoothly. This is largely due to the fact that the majority of their contracts are either FoB or CIF basis, allowing them to pass on the tariff pressure to maintain stability.
The management team, in a recent Q4 FY25 earnings call with analysts, shared their optimistic outlook for the future. Ravi expressed the company’s goal of achieving a top line revenue of ₹7,000 crore and an EBITDA of ₹1,100 crore in the upcoming fiscal year. With EBIT reaching ₹512 crore in FY25, Craftsman Automation is aiming for a significant growth to between ₹650 crore and ₹700 crore in FY26. Ravi also mentioned that the company anticipates depreciation expenses around ₹450 crore but is undeterred by global uncertainties, showing confidence in meeting their targets.
In terms of capital expenditure allocation, Ravi disclosed that ₹550 crore is earmarked for investment in the standalone entity, while the remaining budget will be allocated to subsidiaries like Sunbeam and DR Axion. Flexibility in expenditure distribution will be maintained based on operational requirements. Moreover, there is a possibility of investing ₹40–50 crore in repairing and maintaining older equipment at Fronberg Foundry. Analysts at Motilal Oswal Financial Services foresee a promising growth trajectory for Craftsman Automation Ltd in FY26. The traditional powertrain segment is projected to achieve double-digit revenue growth, surpassing even the margins of Q4 FY25. Sunbeam, the company’s subsidiary, is expected to rake in revenues of ₹1,200 crore with operating margins ranging from 8–10 per cent in the upcoming fiscal year. The standalone aluminium business is on track for a 20 per cent compound annual growth rate, supported by the ongoing production facilities’ ramp-up in Bhiwadi and Hosur. Additionally, DR Axion is anticipated to experience healthy growth with an estimated revenue increase of 8–10 per cent in FY26, possibly accelerating in FY27. The storage solutions segment is predicted to maintain high-teen growth rates in the years to come.
Craftsman Automation Ltd’s proactive approach towards capital investments and strategic growth plans position them well for a successful future in the competitive landscape of the auto component manufacturing industry. With a strong focus on innovation, operational efficiency, and financial stability, the company is poised to capitalize on emerging opportunities and overcome challenges in the market. As they continue to expand their presence and enhance their product offerings, Craftsman Automation Ltd is set to solidify its position as a key player in the sector, driving sustainable growth and value creation for its stakeholders.
