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Craftsman Automation hosted a conference call on Jan 29,
2024. In the conference call, the company was represented by Mr. Srinivasan
Ravi – Chairman and Managing Director.
Key takeaways
of the call
In
Q3 FY24, EBITDA Margin of auto powertrain business has come down; however,
margin of aluminium products segment has gone up on YoY basis driven by
improvement in operating leverage.
Decline
is auto powertrain business is due to challenges like, high base and muted
tractor sales. Going forward, management intends to focus more on aluminium
products and Industrial & engineering segments.
Company
is getting more balanced on the segment-wise diversification.
Management
expects auto powertrain business to clock double-digit growth and bounce back
from FY26 onwards.
In Q3 FY24, value addition part of automotive powertrain
segment was approx. Rs 237 crore.
In Q3 FY24, value addition part of Aluminium products
segment was approx. Rs 97 crore.
In Q3 FY24, value addition part of Industrial &
engineering segment was approx. Rs 73 crore.
Company is revamping its facilities to attack off-highway
segment as there is lot of potential for export and business is very small
overall.
Company continue to increase its exposure to the commercial
vehicle business for overseas markets.
Capex
for 9M FY24 was about Rs 390 crore. Management expect FY24 capex to be around
Rs 500 crore.
Company
is on track to complete setting up of plant/unit at Kothavadi, Coimbatore.
Currently,
company has limited presence in Northern India, where major two-wheeler and
Passenger Car OEMs apart from General Engineering and Farm Equipment sectors
are located. To tap the business potential of these OEMs, board approved
proposal for setting up of a new plant/unit at Salarpur, Bhiwadi, Rajasthan.
Proposed capacity addition of all segments will be in phased manner ranging
from approx. 5% to 15%.
Phase
1 will be for Aluminium Products, which will be completed in 18 to 24 months.
Cost of Phase 1 is about Rs 150 crore, which will be met 90% through Term loan
and balance through Internal accruals. Phase 2 will be for all segments
depending on the business requirement.
The
new plant will be within 100 kms from major OEMs and enable the company to
utilize the plant capacity optimally.
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