Craftsman Automation hosted a conference
call on April 29, 2024. In the conference call, the company was represented by Mr.
Srinivasan Ravi – Chairman and Managing Director.
Key takeaways of the call
In Q4 FY24, commercial vehicle
segment reported flattish performance. Exports remain stressed due to
geopolitical factors. PV segment witnessed growth especially in SUV segment.
Management expects domestic sales to
be muted in Q1 FY25. However expects sales to grow on full year basis in FY25.
Dependence on powertrain segment has
reduced as the company is getting more balanced on the segment-wise
diversification.
ROC has declined marginally but ROE has
improved in FY24 compared to last year.
Company is geared up with higher
capacity.
In Q4 FY24, EBITDA Margin of auto
powertrain business has come down. On the other hand, EBITDA Margin of Aluminium
products business improved.
Going forward, management intends to
focus more on aluminium products and Industrial & engineering segments.
Management expects auto powertrain
business to clock high single digit/ low double-digit growth in FY25.
In Q4 FY24, value addition part of
automotive powertrain segment was approx. Rs 226 crore. Value addition in FY24
was Rs 944 crore.
In Q4 FY24, value addition part of
Aluminium products segment was approx. Rs 107 crore. Value addition in FY24 was
Rs 391 crore.
Management expects strong uptick in
Aluminium products segment from Q2 FY25.
Aluminium prices are increasing; however,
management expects no impact on profitability.
In Q4 FY24, value addition part of
Industrial & engineering segment was approx. Rs 59 crore. Value addition in
FY24 was Rs 276 crore.
Storage business was flat in Q4
FY24. However, for FY25, the company expects robust growth of about 20-25% YoY.
Company expects pick up in off
highway business from FY26.
As Castings requirements are going
up in the country, the company is well placed to benefit given its strong
position in industrial engineering business because of its expertise in dealing
heavy parts.
Capex for FY24 was about Rs 580
crore. Management guided capex of about Rs 500 crore for FY25.
The board approved Raising of funds,
in one or more tranche by way of issuance of equity shares and/or any other
instruments for an aggregate amount not exceeding Rs 1200 Crore. The proceeds
from the fund raise are intended to be utilized, inter-alia, towards repayment/
pre-payment of certain outstanding borrowings availed by the company. This is a
deleveraging strategy.
The board also approved to make an
investment in Kinathukadavu Water Projects LLP upto Rs 10 Crore for the purpose
of water consumption for the Company.
The company is in the process of
setting up two new Greenfield manufacturing facilities at Bhiwadi, Rajasthan
and Kothavadi, Tamil Nadu. The manufacturing facility at Bhiwadi, Rajasthan
will initially focus on manufacturing aluminium products, powertrains and
structural parts, while the manufacturing facility at Kothavadi, Tamil Nadu
will initially focus on manufacturing powertrains for off-highway and
stationary engines, as well as industrial and engineering products for wind
energy. The company has received letter of intent from certain customers and
products that will be manufactured at the aforesaid manufacturing facilities.
The board recommended a final
dividend of Rs 11.25 per equity share of Rs 5 each (225%) for the financial
year ended 31 March 2024. Record date fixed for determining the eligibility
is Monday, 20 May 2024.
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