Companies Economy Live May 18, 2025 0 Comments

Craftsman Automation plans ₹750–800 cr capex in FY26

Craftsman Automation management expects to pass on the incremental tariff pressure as the bulk of their contracts are either FoB or CIF basis

Auto component manufacturer Craftsman Automation Ltd is set to continue its capital expenditure cycle with a planned investment of ₹750–800 crore in FY26, according to Chairman and Managing Director Srinivasan Ravi.

The company remains optimistic and said its operations are largely insulated from ongoing geopolitical disruptions and tariff tensions. The management expects to pass on the incremental tariff pressure as the bulk of their contracts are either FoB or CIF basis.

Speaking to analysts during the Q4 FY25 earnings call, Ravi said that the company aims to achieve a top line of ₹7,000 crore and EBITDA of ₹1,100 crore in FY26. He noted that Craftsman has already reached ₹512 crore in EBIT in FY25 and expects this to grow to between ₹650 crore and ₹700 crore in FY26.

“The depreciation is expected to be around ₹450 crore, and despite global uncertainties, we are ramping up well and confident of meeting the targets,” Ravi said.

Regarding the capex allocation, Ravi explained that ₹550 crore is expected to be invested in the standalone entity. The remaining expenditure will be directed toward subsidiaries including Sunbeam and DR Axion, with flexibility built in depending on operational needs. Additionally, the company is evaluating a potential ₹40–50 crore investment in repair and maintenance of older equipment at Fronberg Foundry.

Craftsman Automation Ltd is poised for robust growth across its key business segments in FY26, according to analysts at Motilal Oswal Financial Services. The traditional powertrain segment is expected to deliver double-digit revenue growth, with margins anticipated to surpass even Q4 FY25 levels. The company’s subsidiary Sunbeam is projected to generate revenues of ₹1,200 crore in FY26, with operating margins in the range of 8–10 per cent.

The standalone aluminium business is on track to grow at a 20 per cent compound annual growth rate (CAGR), supported by the ongoing ramp-up of production facilities at Bhiwadi and Hosur.

Meanwhile, DR Axion (DRA) is also expected to see healthy growth, with revenue projected to rise by 8–10 per cent in FY26 with potential acceleration in FY27. Additionally, the storage solutions segment is forecast to maintain high-teen growth rates in the coming years.