Craftsman Automation Q4 Review: ICICI Securities Maintains 'Buy' Post Decent Results, Hikes Target Price

Craftsman Automation's investments in FY25 were at Rs 10 billion, including: purchase of balance 24% DR Axion stake for Rs 2.5 billion; the Sunbeam investment of Rs 6.1 billion (Gurgaon plant sale in FY26 should reverse ~Rs 3 billion); and Fronberg acquisition for Rs 1.5 billion. The company expects capex to reduce to Rs 7.5–8 billion in FY26 (from Rs 11 billion in FY25). Craftsman Automation guides for revenue/Ebitda of Rs 70 billion/Rs 11 billion in FY26. Debt is expected to reduce next year led by proceeds from Gurgaon plant sale and lower capex.

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ICICI Securities Report

Craftsman Automation Ltd.’s Q4 FY25 Ebitda margin contracted ~480 bps YoY to 13.9%, in-line with our estimate. Margin contraction YoY was led by expansion-related expenses and consolidation of recent acquisitions. We expect Craftsman Automation’s Ebitdam to expand to 16%/17% in FY26E/FY27E with a ramp-up in operations at Craftsman Automation’s new plants and a gradual improvement in profitability at Sunbeam.

We expect revenue to increase by ~25%/15% in FY26E/FY27E led by continuing steady growth from its existing businesses, supported by an increase in the share of business with existing and new customers, new component additions, and revenue addition from Sunbeam/Fronberg acquisitions.

Maintain Buy with a DCF-based target price of Rs 5,300 (from Rs 5,266), implying 20x FY27E EPS.

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