Craftsman Automation - Diversified, High RoCE Ancillary Player: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.We recently interacted with Craftsman Automation Ltd.’s management to understand its business strategy and outlook. Following are the key takeaways: well-diversified business catering to domestic/export passenger vehicles, commercial vehicles, two-wheelers along with industrial components and storage solutions. Portfolio includes cast iron powertrain component machining, aluminum casting/machining, hoists, special purpose machines etc.;though compression ignition powertrain is the key segment contributing ~65% of overall gross profit, aluminum casting/machining is the emerging business opportunity catering to vehicle light weighting and electric vehicles; domestic two-wheeler powertrain/transmission business related aluminum parts subject to EV risk are ~5% of revenue. Craftsman Automation expects this loss to get compensated by new aluminum component projects under PV segment; looking at the paucity of CI casting supply in India in coming years, Craftsman Automation is envisaging investing organically or inorganically in the space to grow its machining business;~30% market share in the industrial storage solutions space with annualised revenue of Rs 4 billion and is expected to grow at ~20% plus compound annual growth rate in coming years;targeting ~25% return on capital employed post taking in consideration capex of Rs 3-3.5 billion in FY23-FY24E..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Craftsman Automation - Diversified, High RoCE Ancillary Player: ICICI Securities

well-diversified business catering to domestic/export PVs, CVs, two-wheelers along with industrial components, storage solutions.

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