Craftsman Automation hosted a conference call on May 9,
2023. In the conference call, the company was represented by Mr. Srinivasan
Ravi – Chairman and Managing Director.
Key takeaways
of the call
Auto sector is expected to grow in FY24 driven by rising
infrastructure growth, construction, mining, agri-commodities transportation,
increasing freight rates etc. Company expects its revenue to grow around 20%
YoY across segments in coming years.
In Q4 FY23, EBITDA Margin of auto powertrain business has
come down due to inflation. However, margin of automotive aluminium products has
gone up on YoY basis driven by operating leverage.
In Q4 FY23, value addition part of automotive powertrain
segment was approx. Rs 241 crore.
In automotive powertrain segment, CV contributed 53% to
segment revenue, Off-Highway 20%, tractors 15% and PV 12% in FY23.
In Q4 FY23, value addition part of automotive aluminium
products segment was approx. Rs 79 crore.
In Q4 FY23, value addition part of Industrial &
engineering segment was approx. Rs 73 crore.
In FY23, Industrial & engineering segment recorded
revenue of Rs 713 crore, out of that storage contributed Rs 376 crore.
Company started supplying products for EVs 2 wheelers. Fresh
orders from existing customers and entry into new user sectors should diversify
business risks.
Company is strengthening its presence in e-commerce and
other sectors which are expected to register significant growth. This will
allow it to utilise its assets optimally and strengthen profitability.
Capex stands at around Rs 300 crore for FY23. Management
expects Capex of about Rs 320 crore in FY24.
DR Axion capacity utilization stood at around 80% in Q4
FY23.
In FY23, exports were about Rs 220 crore.
Rising EV penetration will provide boost to aluminium business
as content in EVs is significantly higher than Internal Combustion Engine (ICE)
vehicles.
DR Axion India acquisition will help the company expand its
foothold in PV segment, leverage their strengths and build better synergies.
Its full benefits are expected to reflect from FY24 onwards.
On standalone basis, Craftsman cash conversion cycle has
come down from 60 days to 56 days.
Management expects debt to come down by around Rs 200 crore
in FY24.
Company has moved to 26% effective tax rate from FY24.
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