Craftsman Automation’s FY26: Growth Powered by Aluminium, While Integration and Capex Shape the Next Phase

Craftsman Automation’s FY26: Growth Powered by Aluminium, While Integration and Capex Shape the Next Phase

Craftsman Automation closed FY26 with its strongest consolidated performance yet. Revenue from operations rose to 8,069 crore, up 42% year-on-year, while EBITDA increased 51% to 1,300 crore. Profit after tax nearly doubled to 384 crore, up 91% year-on-year. The company also reported a strong Q4 finish, with revenue of 2,226 crore, EBITDA of 378 crore, and PAT of 116 crore.

Management cautioned that FY26 and FY25 are not fully comparable because acquisitions were completed across FY25 and FY26. Still, the overall direction is clear. Craftsman is using its expanded platform to grow faster, while simultaneously dealing with the operational realities of ramp-ups, restructuring, and rising input costs.

A three-vertical model, with aluminium now at the center

Craftsman operates through three business verticals: Powertrain, Aluminium Products, and Industrial and Engineering. In FY26, aluminium dominated the consolidated mix, contributing 59% of revenue. Powertrain contributed 27% and Industrial and Engineering made up the remaining 14%.

This mix matters because the company’s growth and margin trajectory is increasingly driven by aluminium. Aluminium also has more exposure to commodity-linked inputs and energy costs, and the company’s current strategy is heavily focused on improving value addition in aluminium products.

Financial summary (Consolidated)

Segment performance: aluminium leads, powertrain improves, storage anchors industrial

Powertrain: steady growth, better profitability, and a long-gestation expansion plan

Powertrain revenue rose from 1,811 crore in FY25 to 2,179 crore in FY26. Segment EBIT increased from 251 crore to 361 crore. In the concall, management explained that the margin improvement seen in the latest quarter was not driven by large scale benefits yet. Instead, the main factor was a reduction in repair and maintenance expenses that had depressed profitability for several quarters.

Capacity utilisation in conventional powertrain was described as roughly 65% to 70%, with an upper range of around 85%. That suggests there is headroom for growth without immediate large expansion, although the company is still adding some capacity.

A separate growth leg is under development through large stationary engine components. Management stated that the first 100 million dollar order book is finalised, and the company expects to reach that revenue level around FY29 or FY30. The business is still in prototype and pilot stages, with revenue currently not meaningful.

Aluminium Products: rapid scale-up, but the focus is shifting to value-added work

Aluminium Products revenue jumped from 3,033 crore in FY25 to 4,789 crore in FY26, while segment EBIT rose from 312 crore to 494 crore. The company highlighted a broad capability set across casting processes, precision machining, surface finishing, and assembly.

In the concall, the most important strategic message was about value addition. Management stated that basic raw casting is becoming less viable as commodity prices, energy, labour, and consumables rise. Craftsman’s preferred model is casting plus machining, and the company is actively reviewing products and customers where pricing does not support profitability.

This approach is most visible at Sunbeam Lightweighting Solutions, where management described margins as still in the single digits and said profitability is not present. The company is exiting unprofitable customers and sub-segments, selling a low-value portion of business of around 30 crore per year, reducing manpower, resetting legacy prices, and enforcing aluminium pass-through arrangements. Management expects to see meaningful traction from Q2 of the current year.

Industrial and Engineering: storage remains the core driver

Industrial and Engineering revenue grew from 846 crore in FY25 to 1,102 crore in FY26. Segment EBIT improved from 19 crore to 49 crore. Within this segment, storage solutions account for 64% of FY26 revenue, while other contract manufacturing and sub-assembly work contributes 36%.

Management also linked storage solutions to opportunities in areas like safe storage for battery manufacturing, including automated storage and retrieval systems and vertical lift modules, although it did not provide explicit revenue guidance for these opportunities.

Alloy wheels and ramp-ups: progress is visible, but expansion is measured

The alloy wheel business was discussed in detail during the QandA. Management said the March exit run rate annualised is around 3 million wheels. Installed capacity is around 5.5 million wheels. The ramp-up has been happening in steps across Bhiwadi and Hosur, with Bhiwadi Phase 1 operating for the full year and Hosur still in ramp-up mode.

FY26 alloy wheel revenue was stated at around 280 crore. Profitability differs by plant. Management indicated that the Bhiwadi plant could be at the highest single digit or even double digit EBIT margins, while Hosur is at single digit margins because utilisation is still building.

Import competition is a key variable. Management noted the need to watch how alloy wheel imports behave after BIS norms have stabilised, and said the company is not in a hurry to commit to further capacity expansion in the current financial year.

Consolidating aluminium businesses: scale, synergy, and a larger addressable opportunity

A major corporate action underway is the planned consolidation of aluminium entities. Management explained that running multiple aluminium businesses as smaller standalone units makes it harder to pursue large global programs efficiently. The company’s view is that global competitors operate at much larger scale, and a unified platform can improve marketing leverage, resource sharing, and operational efficiency.

This consolidation includes DR Axion, Sunbeam, and also the aluminium business within Craftsman. Management also indicated that Craftsman does not currently have a Chennai campus for aluminium, while peers do, and the consolidation could support more rational capacity planning in the Chennai region.

Expansion at Sriperumbudur: a time-bound response to customer demand

A concrete near-term expansion is DR Axion’s greenfield capacity near Sriperumbudur. Management said they could not get the required 50-acre parcel from SIPCOT in time. To avoid a potential two-year delay, DR Axion acquired control of entities holding an adjacent land parcel accumulated by developers. The total land cost was stated at around 150 crore.

Civil construction is underway and the plant is targeted to be commissioned by December, with operations in the next year.

Costs, capex, and leverage: management is candid about what is hard to pass through

Management repeatedly highlighted that manpower cost inflation is a key concern, and is harder to pass through to customers than commodity-linked inputs. The response is productivity improvements through equipment upgrades, layouts, process improvements, and automation.

Leverage remains elevated. The presentation reported a net debt to EBITDA ratio of 2.4x in FY26 and debt-equity of 1.02x. On capex, management did not provide a firm number for FY27 and said decisions will be taken around September, linked to the project pipeline and order inflows.

The company also discussed working capital. Management stated that the spike in working capital needs came with the aluminium ramp-up and said the payment cycles are now more settled, suggesting no major structural change was expected from that level.

Takeaways: FY26 sets the scale, FY27 will test execution

Craftsman Automation’s FY26 performance reflects a company scaling quickly through a combination of organic growth and acquisitions. Aluminium is now the center of gravity in both revenue and strategy. The next phase depends less on adding capacity for its own sake, and more on execution: ramping alloy wheels, improving value addition, restructuring Sunbeam, and integrating aluminium entities to operate at greater scale.

Management’s tone is pragmatic. It acknowledged cost inflation, the difficulty of passing through labour costs, and the margin drag from ongoing capex and ramp-ups. At the same time, it pointed to a mid-teens revenue growth expectation for FY27 and highlighted long-gestation opportunities in large stationary engine components.

For investors, the FY26 results provide evidence of momentum. The FY27 story will be about whether the integration and restructuring actions translate into more stable profitability while leverage gradually moderates.