Company Update : Craftsman Automation Ltd by Motilal Oswal Financial Services Ltd
Better than expected revenue growth drives earnings beat
* Consolidated revenues grew 65% YoY to INR 20b (9% ahead of our estimates). Even on a standalone basis, revenue was about 12% ahead of our estimates
* Beat in standalone revenue was largely driven by a strong 24% QoQ revenue growth from the Aluminum segment
* Consolidated margins have largely come in line with our estimates at 15.1%
* However, given the better than expected revenue growth, EBITDA grew 14% to INR 3b even on QoQ basis and was 9% ahead of our estimate of INR 2.8b. Comparing QoQ as YoY growth for the consolidated entity is not comparable due to the Sunbeam acquisition in the numbers from this fiscal
* On a segmental basis, Aluminum segment margins have improved 160bp QoQ (down 230bp YoY) to 11.7% and was ahead of our estimate of 10.2%. On the other hand, powertrain segment margin declined 60bp QoQ to 14.6% and was below our estimate of 15.2%. Even Industrial segment margin declined 80bp QoQ to 1.4%, and below our estimate of 2.2%
* Overall, PAT grew 20% QoQ (+48% YoY) to INR 912m.
* On a consol basis, its CFO stood at loss of INR 1.3b largely due to highly adverse working capital.
* Further, it has invested about INR 5.7b in capex for H1. Thus, it has reported FCF loss of INR 7b as of Sep end.
* Valuation view: The stock trades at 43.3x/29.6x FY26E/FY27E EPS
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