The Precision Metalworker That Bet Big On Aluminium

From Coimbatore Machine Shop to Global Precision Supplier

Let’s be honest. Nobody walks into a bar and orders a “Craftsman Automation.” The company makes cylinder blocks, gearbox housings, pistons, and storage racking systems. It’s B2B, unglamorous, capital-intensive work. The kind of business that doesn’t headline CNBC but powers the vehicles you drive and the warehouses that hold your Amazon returns.

Founded by Mr S Ravi in 1986 — the year the Sensex was at 1,000 — Craftsman Automation has grown into a ₹7,600+ crore annual revenue business. It’s got three major subsidiaries: DR Axion (acquired FY23, supplies cylinder blocks to Hyundai, Kia, M&M), Sunbeam Lightweighting Solutions (acquired FY25, makes engine castings for Hero MotoCorp and Maruti), and a European footprint in Germany. The story is one of consolidation and scale — turning acquired businesses into EBITDA-accretive units while simultaneously building new plants like there’s no tomorrow.

But here’s where the article gets uncomfortable: management is burning ₹1,200 crore on capex this fiscal alone. Debt rose from ₹2,141 crore (Mar 2025) to ₹3,311 crore (Sep 2025) in six months. Leverage is at 2.55x debt-to-EBITDA and will hit 2.9x by end of FY26 before — fingers crossed — gradually improving. The operating margin story is equally messy: from 20% in legacy years to 15% in FY25 and 15% annualized in 9M FY26.

Investors cheered 51% returns over one year. Analysts are calling it a “compounder.” But under the hood, this is a high-growth, high-leverage story in the middle of a capex supercycle. Some investors will see runway. Others will see risk. Let’s dig into the numbers.

Three Segments. One Answer: “Can You Make It?”

Craftsman Automation manufactures precision-engineered components across three segments. It takes customer specs (or engineering drawings), machines, casts, or assembles, and delivers. The business model is straightforward: high customer stickiness, long-term contracts, and a manufacturing moat built on capabilities and delivery reliability.

Powertrain Segment (27% in H1 FY26, declining): Cylinder blocks, heads, camshafts, turbochargers for CVs, tractors, and construction equipment. Served customers like Mahindra, Hyundai, Kia. Growth here is single-digit because the CV and farm sectors are lumpy. When a new engine platform launches, orders spike. When it plateaus, they don’t. Management bet on ICE vehicles instead of EV pivots — a decision that’s paid off so far, given India’s ~10-year internal combustion timeline.

Aluminium Products Segment (60% in H1 FY26, explosive growth): Cylinder blocks, structural parts, alloy wheels, gearbox housings in aluminium. This segment grew 41% in FY25 and is the crown jewel. The acquisition of DR Axion added high-margin business with passenger vehicle OEMs. New facility at Shoolagiri came online in Q3 FY26 but posted “start-up losses” (management’s term for: we’re not profitable here yet). Alloy wheels capacity at 5.8 million units sits below 50% utilization. Management targets 60–70% utilization by Q3 FY27.

Industrial & Engineering (13%, growing): Racking systems for warehouses, automated storage/retrieval systems, gears, material handling, special-purpose machines. Revenue here grew 19% in FY22–FY24 but is now posting sharp margin improvements (management guided sustainable improvement). E-commerce boom + pharma/auto expansion are tailwinds.

Q3 FY26: The Numbers & The Noise

Result type: Quarterly Results  |  Q3 FY26 EPS: ₹44.90  |  Annualised EPS (Q3×4): ₹179.60  |  TTM EPS: ₹140

What’s a Capex-Heavy Precision Manufacturer Worth?