At a Glance
Craftsman Automation has delivered Q1 FY26 results hotter than a Coimbatore dosa tawa. Revenue jumped 55% YoY to ₹1,784 Cr, and PAT climbed 42% to ₹69.6 Cr. The company is killing it in automotive aluminium and critical engine machining. But here’s the kicker: the stock trades at a P/E of 67, almost like it thinks it’s a luxury fashion brand. Meanwhile, promoter holding slipped below 50%, and margins continue to be under pressure. Investors love the growth story, but caution – one slip, and the valuation balloon could pop.
1. Introduction
Craftsman Automation started in 1986 as a small machining shop and is now a precision manufacturing giant with 12 plants across India. From heavy-duty truck parts to automated storage solutions, they do it all. The company’s evolution is impressive, but like any ambitious teen, it’s juggling multiple balls – growth, capex, debt, and declining promoter stake.
The share price is at ₹6,454 – a cool 20% up in a year. But when a stock trades at a P/E higher than most auto peers, even a small earnings miss can make investors skid.
2. Business Model (WTF Do They Even Do?)
Craftsman is the unsung hero behind engines that roar and warehouses that run like clockwork. Their business segments:
- Automotive: Machining critical engine & transmission parts for M&HCVs and tractors.
- Industrial: Aluminium products, sub-assemblies, and precision components.
- Storage Solutions: Both conventional and automated – think warehouses on steroids.
They’re not making the final car; they’re making sure the car works.
3. Financials Overview
Q1 FY26 is a story of strong growth but thinning comfort:
- Revenue: ₹1,784 Cr (+55%)
- EBITDA: ₹265 Cr (margin 15%)
- PAT: ₹69.6 Cr (+42%)
- EPS: ₹29.2
Annual FY25 revenue hit ₹6,323 Cr (+42%), but profit growth was modest at 5%. Margins compressed from 20% (FY24) to 14% (FY25). Clearly, volumes are up, profits – not so much.
4. Valuation
Current valuations are screaming “premium”:
- P/E Method: EPS ₹88.5 × industry average 35 → ₹3,100
- EV/EBITDA: EBITDA ₹900 Cr × 18 → EV ₹16,200 Cr → ₹5,000/share
- DCF: Assuming 20% growth, discounting at 12% → ₹5,300
Fair Value Range: ₹4,000 – ₹5,300
CMP ₹6,454 = priced like a Lamborghini, delivering like a Maruti.
5. What’s Cooking – News, Triggers, Drama
- Solar investments: Tiny stakes in two captive solar firms – ESG brownie points unlocked.
- Automotive boom: Benefiting from M&HCV and tractor demand.
- Storage solutions: Growth vertical with rising adoption.
- Red flags: Rising debt, promoter stake down to 48.7%, margins slipping.
6. Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 4,706 | 7,116 | 7,116 |
| Liabilities | 1,293 | 1,902 | 1,902 |
| Net Worth | 1,647 | 2,845 | 2,845 |
| Borrowings | 1,755 | 2,358 | 2,358 |
Auditor’s Sarcasm: Assets doubled, debt ballooned – at least both are consistent!
7. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 608 | 513 | 283 |
| Investing | -683 | -625 | -1,643 |
| Financing | 73 | 148 | 1,393 |
Commentary: Ops cash halved while investing cash went negative. Financing saved the day – hello debt!
8. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 15% | 15% | 9% |
| ROCE | 20% | 12% | 12% |
| P/E | 47 | 55 | 67 |
| PAT Margin | 7.9% | 4.3% | 3.3% |
| D/E | 0.9 | 1.0 | 1.0 |
Verdict: Ratios need a protein shake.
9. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 3,183 | 4,452 | 6,323 |
| EBITDA | 684 | 879 | 900 |
| PAT | 251 | 337 | 211 |
Commentary: Revenue zoomed, PAT slammed brakes – thanks, rising costs.
10. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Bosch | 18,087 | 2,012 | 59 |
| Schaeffler | 8,547 | 1,058 | 60 |
| Uno Minda | 16,775 | 934 | 66 |
| Craftsman | 6,323 | 211 | 67 |
Commentary: Highest P/E with lowest profit – the irony writes itself.
11. Miscellaneous – Shareholding, Promoters
- Promoters: 48.7% (down from 58.8% in 2022)
- FIIs: 15.8%
- DIIs: 22.7%
- Public: 12.8%
Promoters cashing out? Or just sharing the love with FIIs?
12. EduInvesting Verdict™
Craftsman Automation is a growth machine with strong positioning in automotive and storage markets. But margins are thinning, debt is rising, and promoter stake is falling – not the cocktail investors dream of.
SWOT Snapshot:
- Strengths: Market leader, strong product portfolio, capacity expansion.
- Weaknesses: Low margins, promoter dilution, high capex.
- Opportunities: EV boom, automated storage demand.
- Threats: Cyclical auto demand, rising costs, leverage risks.
In short, the growth is real, but so are the risks. Great company, risky stock. Buckle up!
Written by EduInvesting Team | 29 July 2025
SEO Tags: Craftsman Automation, Auto Components, Q1 FY26 Results, Stock Analysis
