Craftsman Automation Limited (CAL) announced the reaffirmation of its long-term and short-term credit ratings, alongside an upgrade for its subsidiary, Sunbeam Lightweighting Solutions Limited (SLSL). This follows the proposed consolidation of CAL’s aluminum business subsidiaries. CAL’s rating remains Crisil AA-/Stable/Crisil A1+. The upgrade for SLSL reflects anticipated strong business profile and balance sheet improvement post-merger with DR Axion India Limited (DRAIL).
Credit Rating Actions Summary
On March 20, 2026, Crisil Ratings confirmed actions across three entities of Craftsman Automation Limited (CAL) following an announced scheme of consolidation effective April 1, 2026. The rating agency reaffirmed the ratings for CAL and its subsidiary DRAIL, while upgrading the ratings for SLSL.
Rating Actions by Entity
Craftsman Automation Limited (CAL)
- Long Term Rating: Reaffirmed at Crisil AA-/Stable.
- Short Term Rating: Reaffirmed at Crisil A1+.
DR Axion India Limited (DRAIL)
- Long Term Rating: Reaffirmed at Crisil AA-/Stable.
- Short Term Rating: Reaffirmed at Crisil A1+.
Sunbeam Lightweighting Solutions Limited (SLSL)
- Long Term Rating: Upgraded to Crisil BBB+/Watch Positive (from Crisil BBB-/Positive).
- Short Term Rating: Upgraded to Crisil A2/Watch Positive (from Crisil A3).
Rationale for Rating Actions
CAL & Consolidated Performance
The reaffirmation of CAL’s ratings reflects a strong business risk profile, primarily driven by the aluminum segment’s robust revenue growth, which increased to Rs.5843 crore in the first nine months of fiscal 2026 (up from Rs.3941 crore previously). Operating profitability is estimated at ~15% this fiscal. While capital expenditure is expected to raise debt levels to approximately Rs.3500 crore by the end of fiscal 2026, leading to temporary moderation in debt metrics (Debt/EBITDA expected at ~2.8-2.9 times), a gradual improvement to below 2.5 times is forecast from the next fiscal onwards.
Impact of Merger
The ratings take note of the merger scheme where SLSL and DRAIL will consolidate into a single entity, with debt facilities moving to SLSL. This reorganization is expected to substantially improve the combined entity’s business profile and financial risk. The merged entity is projected to achieve revenues of Rs.2900-3000 crore with operating profitability around ~14%, maintaining strong debt protection metrics.
SLSL Improvement
The upgrade for SLSL reflects the successful turnaround achieved post-acquisition by CAL, reducing employee costs and improving operating margins to ~6% in the first nine months of fiscal 2026, with expectations to reach ~8-10% medium term. The merger significantly enhances SLSL’s portfolio, profitability, and balance sheet strength.
DRAIL Strength
DRAIL’s reaffirmed ratings stem from its established position supplying critical engine components to major passenger vehicle OEMs like Hyundai and Kia. Revenue grew strongly by ~30% in the first nine months of fiscal 2026. Its financial profile remains healthy, supported by CAL’s parentage, despite expected moderation in debt metrics due to capex and corporate guarantees issued to SLSPL.
Key Financial Indicators for CAL (Consolidated)
The table below summarizes key consolidated indicators:
| Metric | 2025 (Rs crore/Times) | 2024 (Rs crore/Times) |
|---|---|---|
| Revenue | 5693 | 4452 |
| PAT | 164 | 299 |
| PAT margin | 2.87% | 6.72% |
| Adjusted debt/Adjusted networth | 0.78 | 0.91 |
| Interest coverage | 3.97 | 5.13 |
Source: BSE
