Craftsman Automation hosted a conference call on January 25, 2022. In the conference call the company was represented by Mr. Srinivasan Ravi – Chairman and Managing Director.

Key takeaways of the call

In Q3 FY22, company faced challenges in terms of pandemic and raw material inflation. Raw material prices inflated topline which led to lower margins.

During 9M FY22, PAT crossed Rs 100 crore which is highest ever for the company.

Capex for 9M FY22 was approx Rs 143 crore.

Tractor business was down on YoY basis.

In Automotive aluminium products margin pressure is coming from operating leverage not raw materials. Company is expecting reduction in working capital going forward of approx Rs 60-80 crore.

In Q3 FY22, Automotive aluminium segment value addition was approx Rs 43 crore compared to Rs 42 crore in Q3 FY21.

Management expects good growth in sales in Q4 FY22. Company expects 20-30% growth in storage solutions in Industrial and engineering segment. In Q3 FY22, Industrial and engineering segment value addition was approx Rs 65 crore compared to Rs 62 crore in Q3 FY21.

In Automotive powerstrain segment, company witnessed reduction in value addition portion compared to Q2 FY22 mainly due to inventory lag and operating leverage. In Q3 FY22, Automotive powerstrain segment value addition was Rs 190 crore compared to Rs 176 in Q3 FY21.

Management is confident that by H2 FY23, demand for heavy duty vehicles will grow by significant amount.

Company got new orders for construction machinery segment and also got small orders from outside India. Company expects to get new business on E-axle and automatic gearbox front. Company has also been approached by many start ups for product inquiries.

Going forward, company expects good growth in exports as well as domestic market.

In Automotive powerstrain segment, commercial vehicles contribute more than 50% and 20% comes from off road.

Going forward, company expects more stable margins and good growth in Industrial and engineering segment.

In Automotive aluminium segment, Capacity utilization stood at approx 40% for Q3 FY22.

Company is looking at approx Rs 50-80 crore of debt reduction in FY22.