Detailed Narrative
Overall Performance and FY26 Guidance
Craftsman Automation concluded FY25 with a consolidated EBIT of Rs.512 crores. The company has reiterated its ambitious FY26 guidance, targeting a top line of Rs.7,000 crores and an EBITDA of Rs.1,100 crores. EBIT for FY26 is projected to be in the range of Rs.650-700 crores, factoring in an estimated depreciation of Rs.450 crores. Management expressed confidence in sustaining these targets despite geopolitical situations, citing the company's insulated position and competitive offerings.
Powertrain Segment Outlook and New Business Development
The powertrain segment showed slight improvement in Q4 FY25 due to operating leverage and stabilization of market conditions. The existing powertrain business is expected to achieve double-digit growth in FY26, with quarterly revenue run rates exceeding Rs.500 crores. The new powertrain business, focusing on stationary engines, is a long-term growth driver. While initial revenues are now expected in FY27 (pushed from FY26), the segment is projected to reach a peak revenue of $100 million (approximately Rs.800 crores) by 2029-2030, with the Kothavadi plant already operational.
Aluminum Business: Sunbeam and DR Axion
The aluminum business, including Sunbeam and DR Axion, is undergoing significant changes. Sunbeam reported Q4 revenue of Rs.300 crores with an EBITDA of Rs.23 crores (6-7% margin). For FY26, Sunbeam's revenue is guided at Rs.1,200 crores with a blended EBITDA margin of 8-10%, though Q1 is expected to be muted due to plant consolidation. DR Axion is projected to grow at an 8-10% CAGR in FY26. The two-wheeler alloy wheel segment, a part of the aluminum business, recorded Rs.40 crores in Q4 revenue, being EBITDA-neutral and EBIT negative by Rs.5 crores.
Storage Solutions Business Growth
The automated storage division demonstrated strong improvement in Q4 FY25 margins, driven by new orders, market penetration, and optimized product costing. Management expects this segment to continue its robust performance, projecting a growth rate in the high teens, almost 20%, for FY26. This business is maturing and is seen as a standalone viable solution offering.
Capital Allocation and Debt Management
The company's gross debt stands at approximately Rs.1,900 crores. For FY26, the total group CAPEX is guided at Rs.750-800 crores, with Rs.550 crores allocated to Craftsman standalone and Rs.40-50 crores for Fronberg's repair and maintenance. A key deleveraging strategy involves the potential sale of Sunbeam's land in Q3 or Q4 FY26, which is expected to generate around Rs.300 crores. The company also noted a one-time📎 employee cost of Rs.4.5 crores in Q4 FY25 related to German operations.
Export Strategy and Market Diversification
Craftsman Automation emphasizes its diversified customer portfolio, with the top 60% of revenue now coming from 12 customers. The company's product mix shows commercial vehicles at 17%, two-wheelers at 18%, passenger vehicles at 32%, storage at 10%, off-highways at 5%, and tractors at 4%. The company is leveraging India's position as an export hub for automotive components, particularly to developing markets in Africa and South America, and has not experienced any adverse impact from tariffs on its high value-added products.