Craftsman Automation: Powering Ahead with Strong H1 FY26 Performance and Strategic Expansion

Craftsman Automation Limited, a diversified engineering company, has delivered a robust performance in the first half of fiscal year 2026 (H1 FY26), showcasing significant growth across its key business segments. The company reported a consolidated revenue of INR 3,786 crores, marking an impressive 60% year-on-year increase. This strong top-line growth translated into healthy profitability, with EBITDA rising by 45% to INR 582 crores and Profit After Tax (PAT) growing by 32% to INR 160 crores. These figures underscore Craftsman Automation's operational efficiency and strategic positioning in a dynamic market.

The Aluminium Products segment emerged as the primary growth driver, contributing a substantial 60% to the total revenue with INR 2,275 crores, reflecting a remarkable 105% year-on-year growth. This surge highlights the increasing demand for lightweighting solutions and the company's strong capabilities in high-pressure, low-pressure, gravity, and sand casting. The Powertrain segment also demonstrated solid performance, generating INR 1,034 crores (27% of revenue) with a 22% growth. The Industrial & Engineering segment contributed INR 476 crores (13% of revenue), growing by 17%. This balanced growth across segments, with Aluminium Products leading the charge, indicates the company's diversified revenue streams and ability to capitalize on various market opportunities.

Strategic Investments Fueling Future Growth

Craftsman Automation is not just focused on current performance; it is actively investing in future growth through strategic CAPEX and capacity expansions. The company's Kothavadi plant, with its Phase-I operational for engineering products, is poised to contribute significantly to the Powertrain segment. The management anticipates the stationary engines revenue stream to commence by 2029, backed by a $100 million order book, with$50 million already secured. This long-term vision is supported by a disciplined capital allocation strategy, with new CAPEX projects targeting a pre-tax Return on Capital Employed (ROCE) of 20%.

Another key initiative involves a CAPEX of INR 280 crores for DR Axion India to expand capacity, particularly for cylinder blocks within the aluminum segment. This expansion is crucial to meet the growing global and domestic demands, especially as Chennai emerges as a global automotive hub. The company acknowledges the long gestation period for these large-scale projects, with revenue realization expected in 2-3 years. However, the management's confidence stems from strong customer engagements and the strategic importance of these expansions.

Operational Excellence and Market Positioning

Craftsman Automation's commitment to operational excellence is evident in its efforts to improve efficiency and reduce costs. The restructuring of the Sunbeam business, including the relocation of operations from Gurgaon to the new Bhiwadi plant, is expected to yield significant benefits. The company aims to achieve a double-digit EBITDA margin for Sunbeam by FY27, with revenue remaining stable. This focus on rationalization and cost reduction is crucial for margin sustainability.

The company's net debt-to-EBITDA ratio stood at 0.94 for H1 FY26, with a consolidated net debt-to-EBITDA of 2.46. Management expects this ratio to be closer to two for FY27, partly aided by the planned sale of the Gurgaon plant land, which will help reduce overall debt. This proactive approach to debt management ensures that the company's growth is sustainable and well-capitalized. Craftsman Automation's diversified end-user sectors, including commercial vehicles, passenger vehicles, two-wheelers, farm equipment, and power generation, further solidify its market position and reduce cyclical risks.

Outlook and Future Prospects

Craftsman Automation is poised for continued growth, driven by its strategic investments, operational efficiencies, and strong market demand. The company sees immense opportunities in the aluminum casting business, with demand described as just the