Fortune Scrip     

Published: December 15, 2025
Updated: December 15, 2025

Craftsman Automation

Flying high on powertrain biz growth

Coimbatore-headquartered Craftsman Automation, incorporated in 1986, is a diversified engineering company with vertically integrated manufacturing capacities. It is engaged in the business of manufacturing engineering components, sub-assemblies and other products, and rendering contract manufacturing services (CMS) to various industries.

In the powertrain segment, Craftsman manufactures engine components, including cylinder blocks, cyclinder heads, armshafts, transmission parts, gearbox housings, turbochargers and bearing caps. Its aluminium products segment includes precision-engineered components such as crankcases and cylinder blocks for two-wheelers, engines and structure parts for passenger vehicles, and gearbox housings for heavy commercial vehicles.

The company has a total built-up area of over 1.5 million sq ft. It has in-house state-of-the-art equipment, an engineered layout with process controls, and the necessary automation for quality and productivity.

During its four decades of existence, the small, south-based company has spread across the country, including at Pithamapur, Pune, Sriperumputur, Jamshedpur, Faridabad, Thrissur and Bengaluru. Besides expanding organically, the company has also resorted to inorganic route. It acquired the entire 100 stake of South Korean company Dr Axion India in two tranches, and in February 2023 the company was made a subsidiary of Craftsman. In 2024-25, Craftsman acquired a 100% stake in of the legal and beneficial interest of Sunbeam, making the latter a wholly owned subsidiary. Earlier, the company had promoted a joint venture with Carl Stahl and Mitsubishi of Japan.

STRONG FINANCES

Despite some brief challenging periods, the company has made rapid strides on the financial front. During the last 9 years, its sales turnover has expanded more than four times from Rs 1,104 crore in fiscal 2017 to Rs 5,090 crore in fiscal 2025, with operating profit shooting up from Rs 228 crore to Rs 833 crore and the profit at net level surging from Rs 80 crore in FY2019 to Rs 337 crore in FY24, before declining to Rs 201 crore in 2025. The company's financial position is very strong, with reserves at the end of March 2025 standing at Rs 3,018 crore -- over 121 times its tiny equity capital of Rs 12 crore.

But we have not picked this company as Fortune Scrip on the basis of its past laurels -- we are confident that its future prospects are even more promising. Consider:

FY26 UPSWING

• Reduced demand for the company's products during 2025 come to an end as soon as the new fiscal 2026 began. Q1FY26 revenue grew 60% to Rs 3,786 crore, with EBIDTA rising 45% to Rs 582 crore and net profit spurting 32% to Rs 160 crore. Its performance during Q2FY26 was even more heartwarming with revenues crossing the Rs 2,000-crore mark, indicating a 65% jump over the same quarter a year ago. EBIDTA rose 56% to Rs 312 crore as compared to Rs 200 crore in the corresponding quarter a year ago, and the profit at net level shot up 47% to Rs 91 crore. Thus, the company's performance during the first half of fiscal 2026 dispersed the clouds of gloom noticed in fiscal 2025, and CAL is all set for a cheerful journey going ahead.
• The integration of South Korean company Dr AIPL, which was acquired by CAL in 2023, is shaping up very well, and research analysts at HDFC Securities believe that the synergy benefits will further enhance the overall consolidated performance. The company has maintained its track record of creating and gaining market leadership organically enabled by capital efficiency and product mix. Capacity utilisation is expected to improve across categories, especially the aluminium di-casting vertical, add the HDFC Securities research analysts.

PLANTS' SYNERGY

• In 2024, the company undertook a greenfield expansion to set up a manufacturing complex in its 48-acre site at Kothawadi near Coimbatore, near the existing plant. As both plants are within 45 km of each other, operational management is quite easy, and both plants have better operational synergy. This expansion has proved highly beneficial to the company, which has started gaining from the 'China+1' policy stance of Western countries and the 'Make in India' initiative of the Indian government. The new plant has given a big boost to the company's topline as well as bottomline.
• The management expects the powertrain segment to grow in high single digits/low double digits over FY26-27 due to the high base of FY23. Dr Axion has of late finalised a new order from Hyundai for its new Talegaon plant, which became operational in the second half of FY25. The management expects the automotive powertrain business to grow at a fast pace in FY26-27 on the back of one of the largest export orders. The company is also revamping its capacities to cater to demand for the off-highway segment.

BUYING SPREE

• The company is continuously in expansion mode -- both organic and inorganic -- in order to expand its capabilities and product range. After acquiring the Indian arm of South Korean Axion, CAL acquired 100% equity in INOS 24-004 GmbH, a German holding company which has a wholly owned subsidiary INOS 24-003 GmbH. The German holding company is now a wholly owned subsidiary of CAL. CAL is also finalising an acquisition of Fronberg Guss Immobilien GmbH of Germany, which is a high-tech foundry for large engines used in industrial applications. The deal cost is 5.5 million euros and the management will have to invest another Rs 60 crore to further improve efficiencies. The company, located in Schwondort-Fronberg in Germany, comprises a non-casting foundry and specialises in iron casting solutions serving a broad variety of markets and leading customers globally. At home, CAL has taken over Sunbeam Lightweighting Solutions, which specialises in automotive aluminium di-casting and focuses on aluminium components for two-wheelers and passenger vehicles. It is a wholly owned subsidiary of Mumbai-based private equity firm Kedara Capital. According to CRISIL Rating experts, this acquisition will push up CAL's revenues by 20-25 per cent. Again, this acquisition will give the company an entry in the US market, in addition to complementary and mutually beneficial capabilities. At the same time, the company has set up new manufacturing facilities at Bhilwadi in Rajasthan and Kothiwadi in Tamil Nadu through the organic route. When all these new and acquired facilities are integrated, they are expected to start delivering growth momentum from fiscal 2026 onwards.

UPBEAT PROSPECTS

Research analysts at brokerage house Motilal Oswal estimate a CAGR of 14%/15%/31% in consolidated revenue/EBIDTA/net profit over fiscal 2024/2025. The Korean company exclusively serves the PV segment, where CAL's contribution is negligible. This acquisition will help CAL strengthen its presence in PVs. The acquisition of the German company will enable CAL to get a critical foothold in the larger engine segment in the industrial power-pack business.

• CAL is now expected to grow rapidly as it can now boast of an enviable list of marquee clients like Daimler India, Tata Motors, Tata Cummins, Mahindra & Mahindra, Simpson & Company, Ashok Leyland, Escorts, TAFE Motors and Tractors, Mitsubishi Heavy Industries, John Deere, Perkins and JCB India. The company also has well-established relationships with marquee global OEMs. As fiscal 2025 was a challenging year for CAL, its share price has declined from the 52-week high of Rs 7,371 to Rs 6,900. But investor sentiment is undergoing a positive change, and several research analysts have set a target price of Rs 7,500 within a year. Discerning investors with a longterm perspective should include/augment these stocks in their portfolio.