Craftsman Automation Q1 FY27: Scale-up Quarter, Aluminium Leads, Capex Pipeline Expands

Craftsman Automation entered FY27 with a strong start. For the quarter ended 30 June 2026, consolidated revenue rose to 2,432 crore. EBITDA increased to 408 crore with an EBITDA margin of about 17%. PAT came in at 151 crore, up sharply versus 70 crore in Q1 FY26.

The quarter’s narrative was shaped by three themes: aluminium-led growth as new capacities ramp, a steady powertrain base with a longer-cycle stationary engine opportunity building toward FY28 to FY30, and a visible uptick in Industrial and Engineering driven by demand in storage and material handling.

A quarter where segment mix stayed stable, but execution improved

The company operates through three business verticals: Powertrain, Aluminium Products, and Industrial and Engineering. In Q1 FY27, Aluminium Products remained the largest contributor at 61% of consolidated revenue, followed by Powertrain at 26% and Industrial and Engineering at 13%.

The presentation highlighted that Craftsman has 31 manufacturing facilities, including a presence in Germany, with a total built-up area of over 3.8 million square feet. The business model is positioned as an end-to-end solution provider, spanning design, process engineering, foundry, machining, fabrication, surface treatment, assembly, and testing.

Financial snapshot (consolidated)

Aluminium Products: growth path supported by prior investments

Aluminium Products delivered 1,479 crore of revenue in Q1 FY27 versus 1,071 crore in Q1 FY26, with EBIT rising to 150 crore from 108 crore. Management described aluminium as being on a growth path for many more quarters, explicitly linking it to the scale of investments already made and to capacities that are still coming into place and maturing.

Within Aluminium Products, the presentation described a broad set of offerings including mobility parts, structural parts, industrial aluminium castings, and EV-related parts such as battery housings and motor housings. Process capability spans high pressure die casting, low pressure die casting, gravity die casting, sand casting, precision machining, assembly, and surface finishing.

The Q1 FY27 revenue mix inside the aluminium segment was presented by subsidiary and by end-industry. By subsidiary, the split was Craftsman 43%, DR Axion 31%, and Sunbeam 26%. By industry application, the segment was split between 4W at 50%, 2W at 46%, and Others at 4%.

In the concall, management added an operational datapoint: aluminium operations were said to be operating at more than 80% utilisation. This set the context for new capacity planning at Hosur.

Powertrain: steady base plus a long-cycle stationary engine build-up

Powertrain revenue rose to 623 crore in Q1 FY27 from 496 crore in Q1 FY26. EBIT increased to 114 crore from 76 crore. The segment covers parts such as cylinder blocks, cylinder heads, camshafts, transmission parts, bearing caps, and turbo chargers, and serves commercial vehicles, tractors, off-highway and special utility vehicles.

Management discussed a specific opportunity in large stationary engines. It reiterated a target of USD 100 million revenue in FY29 and stated the company is on track. The management explained that Kothavadi is the foundry location while machining and billing would happen from the parent Arasur plant.

Importantly, management gave time-bound color on ramps. It stated meaningful revenues should start from FY28 and that the first year of seeing full revenue would be around FY30, based on validation and productionisation cycles. It also added that after the initial supplier-acceptance phase, newer incremental orders may reach production faster, with a time frame of about two years for newer wins.

Industrial and Engineering: operating leverage from demand upswing

Industrial and Engineering revenue increased to 330 crore in Q1 FY27 from 216 crore in Q1 FY26. Segment EBIT moved sharply to 30 crore from 5 crore.

Management attributed the improvement to an upswing in demand in storage and material handling, linking it to a capex cycle in India. It also noted this segment is not capex-intensive and therefore benefits from operating leverage as volumes rise. Management stated the margin improvement is not a one-quarter spike and expects the run-rate to hold as orders increase quarter-on-quarter.

Capex and execution: a proactive build, paced to demand

The concall was explicit on capex intent and pacing. Management indicated:

• Hosur Unit 3 capex is intended for additional high-pressure die casting capacity for automotive parts, not for alloy wheels.
• Capacity will be added in phases, with timelines spreading across multiple quarters depending on demand.
• DR Axion has an approved capex plan of around 430 crore, with spending potentially spilling into the next year depending on program ramp.
• Standalone capex has been averaging more than 1,000 crore and is expected to continue, with potential acceleration if growth traction remains strong.

When asked to consolidate the outlook, management broadly agreed that a conservative estimate of about 1,500 crore capex for the year is reasonable (subject to revisions). It also stated that funding is expected through internal accruals, while acknowledging working cash mismatches can occur.

Sunbeam turnaround: exit legacy negative margin parts, target margin normalization

Management spoke directly about restructuring at Sunbeam. It said restructuring is more or less complete, but some exit actions were postponed because customers requested continued support through the transition.

The company described the exit portfolio as legacy parts and businesses, including some that were more than a decade old, and said these carried negative margin profiles. Management expects about 90% of the turnaround to be complete by December 2026 and guided for mid-teens EBITDA margins by Q4, even if there is a potential 10% to 20% reduction in top line as low value-add work is exited and replaced.

Takeaways

Craftsman Automation’s Q1 FY27 outcome combined scale with improving profitability, while keeping segment mix broadly consistent. Aluminium continues to act as the primary growth driver, supported by ongoing capacity ramp-up. Powertrain is being reinforced by a longer-cycle stationary engine opportunity building towards FY28 and FY30. Industrial and Engineering showed a step-up, with management pointing to India’s capex cycle as a structural support.

The key monitorables from here are execution of phased capacity additions, the pace of Sunbeam’s margin normalization by December and Q4, and the timing of meaningful stationary engine revenues from FY28 onward.