Craftsman Automation hosted a conference call on April 29, 2024. In the conference call, the company was represented by Mr. Srinivasan Ravi – Chairman and Managing Director.

Key takeaways of the call

In Q4 FY24, commercial vehicle segment reported flattish performance. Exports remain stressed due to geopolitical factors. PV segment witnessed growth especially in SUV segment.

Management expects domestic sales to be muted in Q1 FY25. However expects sales to grow on full year basis in FY25.

Dependence on powertrain segment has reduced as the company is getting more balanced on the segment-wise diversification.

ROC has declined marginally but ROE has improved in FY24 compared to last year.

Company is geared up with higher capacity.

In Q4 FY24, EBITDA Margin of auto powertrain business has come down. On the other hand, EBITDA Margin of Aluminium products business improved.

Going forward, management intends to focus more on aluminium products and Industrial & engineering segments.

Management expects auto powertrain business to clock high single digit/ low double-digit growth in FY25.

In Q4 FY24, value addition part of automotive powertrain segment was approx. Rs 226 crore. Value addition in FY24 was Rs 944 crore.

In Q4 FY24, value addition part of Aluminium products segment was approx. Rs 107 crore. Value addition in FY24 was Rs 391 crore.

Management expects strong uptick in Aluminium products segment from Q2 FY25. 

Aluminium prices are increasing; however, management expects no impact on profitability.

In Q4 FY24, value addition part of Industrial & engineering segment was approx. Rs 59 crore. Value addition in FY24 was Rs 276 crore.

Storage business was flat in Q4 FY24. However, for FY25, the company expects robust growth of about 20-25% YoY.

Company expects pick up in off highway business from FY26.

As Castings requirements are going up in the country, the company is well placed to benefit given its strong position in industrial engineering business because of its expertise in dealing heavy parts. 

Capex for FY24 was about Rs 580 crore. Management guided capex of about Rs 500 crore for FY25.

The board approved Raising of funds, in one or more tranche by way of issuance of equity shares and/or any other instruments for an aggregate amount not exceeding Rs 1200 Crore. The proceeds from the fund raise are intended to be utilized, inter-alia, towards repayment/ pre-payment of certain outstanding borrowings availed by the company. This is a deleveraging strategy.

The board also approved to make an investment in Kinathukadavu Water Projects LLP upto Rs 10 Crore for the purpose of water consumption for the Company.

The company is in the process of setting up two new Greenfield manufacturing facilities at Bhiwadi, Rajasthan and Kothavadi, Tamil Nadu. The manufacturing facility at Bhiwadi, Rajasthan will initially focus on manufacturing aluminium products, powertrains and structural parts, while the manufacturing facility at Kothavadi, Tamil Nadu will initially focus on manufacturing powertrains for off-highway and stationary engines, as well as industrial and engineering products for wind energy. The company has received letter of intent from certain customers and products that will be manufactured at the aforesaid manufacturing facilities.

The board recommended a final dividend of Rs 11.25 per equity share of Rs 5 each (225%) for the financial year ended 31 March 2024. Record date fixed for determining the eligibility is Monday, 20 May 2024.