Craftsman Automation hosted a conference call on October 19, 2021. In the conference call the company was represented by Mr. Srinivasan Ravi – Chairman and Managing Director.

Key takeaways of the call

H1 FY22 witnessed strong growth; however it is not fully comparable with H1 FY21 due to exceptional nature of that year.

Debt to equity has improved from 0.72 to 0.69. Company has aimed to reduce its debt by Rs 150 crore this year.

In FY21, Return on capital (ROC) on a pretax basis was 16% which has improved to 18% in H1 FY22.

Company has achieved a PAT of Rs 49 crore in Q2 FY22, which is highest ever for the company in a quarter.

Onetime expense of repair and maintenance of Rs 10 crore was added in Q2 FY22.

Steel price increases has been passed on to the consumers. Although it has inflated the topline, but EBITDA margins has been suppressed.

Utilization in Q2 FY22 was around 60% on powertrain business. Company expects this number to improve going forward.

Storage solutions business was Rs 134 crore in H1 FY22 compared to Rs 104 crore in FY21 (full year).

Company has taken various cost saving initiatives to cut operating costs.

Company believes automotive aluminium products segment volumes will stay intact till at least 2027. Company sees no threat from EV till next 5-6 years.

Company is in talks with a large customer for its export order, more details of which will be revealed later. As order is in enquiry stage.

Industrial and engineering segment has been impacted by steel price which has led to degrew in its margin. Company believes in H2 FY22 company will have more exports in this segment which will boost its EBITDA margins and improve financial numbers.

In Industrial and engineering segment, management expects EBIT level sustainable target to be 14% going forward.

Value addition stood at Rs 360 crore in H1 FY22 as compared to Rs 520 crore in FY21 (full year).

Management expects automotive aluminium products segment revenue to be around Rs 220 crore in H2 FY22 compared to Rs 189 crore in H1 FY22.

Management guidance for FY23 is Rs 650 crore for automotive aluminium products revenue, with an improvement in EBITDA margin.

Management believes automotive powerstrain and others segment will continue to grow in coming years.

Content per vehicle has improved from the last 2-3 years. Now it's on a stable level.

More than 50% of automotive powerstrain business is coming from CVs and about 20% is coming from off road.