Craftsman Automation Limited hosted an earnings conference call on October 29, 2026, to discuss its Unaudited Financial Results for the quarter and half year ended September 30, 2026. The call provided insights into the company’s performance, including growth drivers, challenges such as commodity price volatility and energy costs, and strategic initiatives across its key segments like Powertrain and Aluminum.
Craftsman Automation Earnings Conference Call Transcript – October 2026
On October 29, 2026, Craftsman Automation Limited held an earnings conference call to review its Unaudited Financial Results for the quarter and half year ended September 30, 2026. The management provided an update on the company’s operational performance, market conditions, and future outlook.
Financial Performance and Outlook
Mr. Srinivasan Ravi, Chairman and Managing Director, highlighted that the company has weathered headwinds from the war and sharp commodity price increases, which are now on a lower trajectory. Craftsman Automation is on a growth path, with capacity expansion continuing. Revenues from the stationary engine segment are expected to start from FY’29, peaking around $100 million by FY’30. The company anticipates continued growth in Powertrain and Aluminum segments, with some short-term, medium-term, and long-term prospects being executed. The DR Axion Plant-2 has commenced trial production, and Sunbeam is undergoing a transformation, with Q3 and Q4 expected to be better, leading to new orders and leveraging capacities for newer products.
Segment-Specific Updates
The Aluminum segment experienced a temporary correction in margins due to increased inventory and raw material price fluctuations, but the company is in discussions with customers for price rationalization, expecting benefits in the next two quarters. The Powertrain segment is expected to see continued growth, though tractor segments might experience a slight contraction in the next two quarters. New plants are in a ramp-up phase, with operating leverage expected to improve over the next two quarters. The company is also expanding its capabilities in Aluminum casting and machining.
Regarding the German subsidiary, its foundry is reportedly performing well, and a new machining shop is being established to support local customers, with an investment of around Rs. 100 to Rs. 130 crores. Craftsman Automation remains cautious about extensive foreign investments due to associated risks.
Key Takeaways from Q&A
- Gross Profit Growth: Expected to continue at a similar pace for the next two to three quarters, driven by past investments and pipeline developments.
- Price Correction: Needed for legacy products and to offset rising manpower and energy costs, potentially ranging from 6-7% to 15-20% on gross margin.
- Automotive Industry Trends: Growth expected to be strong, particularly in passenger vehicles and two-wheelers, with increasing opportunities from new product launches and outsourcing trends.
- Debt Position: Gross debt increased to Rs. 3,618 crores in September 2026, despite QIP proceeds, primarily due to significant CAPEX and working capital requirements. Net debt to EBITDA is projected at 1.7-1.8x for the year.
- CAPEX: Significant CAPEX was undertaken in the first half, with the next phase of CAPEX for infrastructure being less capital-intensive.
- Sunbeam Business: The company is exiting low-margin businesses, which will reduce top-line but improve absolute margins.
- Aluminum Margins: Discussions with customers are ongoing for price corrections and past impacts. Margins are expected to normalize as commodity prices stabilize and operating leverage improves.
- German Subsidiary: The foundry is performing well, and a small machining shop is being set up. The company is not looking for large foreign acquisitions.
- Stationary Engine Segment: Order book is around $100 million, with revenue booking expected to start from Q3/Q4 FY’29, reaching a run rate of 30% by FY’28 and 50% by FY’29.
- EV Segment: Craftsman is present in the EV space, primarily with alloy wheels and Aluminum structural parts, with potential for increased Aluminum content in future EV platforms.
The management emphasized that size matters in catering to larger OEMs and that Craftsman Automation is on track to reach a critical mass that will ensure stability and growth for the next 5-10 years.
Source: BSE
