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Dolat Capital Report
Craftsman Automation Ltd. printed decent set of numbers in Q2 FY24. Revenue grew 13.6% QoQ to Rs. 11.79 billion led by strong growth in Dr Axion India, partially offset by muted growth in powertrain business.
Ebitda grew 10.9 % QoQ to Rs. 2.37 billion. Margin contracted 50 bps QoQ to 20.1 % due weak product mix.
Management expects powertrain business revenue to grow with high single digit or low double digit in FY24 while aluminum business would see strong progress led by strong growth in Dr Axion India business.
We expect strong 30% earnings per share compound annual growth rate over FY23-26E, led by-
new business win in powertrain segment,
growth and margin expansion in aluminium product business and
debt repayment from FY25 onwards.
Expect Craftsman Automation to continue trade at premium valuation due to its engineering capabilities.
We value the stock at Rs 5627 (22 times FY26E earnings per share) and suggest 'Buy' on dips. Recommend 'Accumulate'.
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