Craftsman Automation Q4 Results Review - Weak Quarter, Gradual Recovery Likely From Q1 Onwards: Motilal Oswal

Motilal Oswal

Craftsman Automation Ltd. reported a weak Q4 FY24, largely due to the subdued performance of the powertrain division, resulting in a lower revenue/profit after tax of Rs 11.1 billion/Rs 0.62 billion (versus estimate of Rs 11.9 billion/ Rs 0.86 billion).

However, aided by the strong order backlog in the Al and industrial engineering segments, we expect Craftsman Automation’s performance to improve over our forecast period.

To factor in the near-term slowdown in commercial vehicles and tractors, we cut our FY25E/26E EPS by 6%/5%.

We estimate a compound annual growth rate of 15%/17%/27% in consolidated revenue/Ebitda/profit after tax over FY24-26E, led by new order wins.

Given its attractive valuation at 19 times FY26E EPS, we reiterate our Buy rating with a target price of Rs 5,305 (valued at 23 times FY26E EPS).

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