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HomeInfrastructureCraftsman Automation Sets ₹850 Crore Capex for FY25, Aims for ₹7,000 Crore...

Craftsman Automation Sets ₹850 Crore Capex for FY25, Aims for ₹7,000 Crore Revenue by FY26

Craftsman Automation Sets ₹850 Crore Capex for FY25, Aims for ₹7,000 Crore Revenue by FY26

Craftsman Automation Ltd, a prominent name in the automotive and industrial components manufacturing sector, is laying out an ambitious plan for growth. With a target revenue of ₹7,000 crore by FY26, the company is planning an aggressive ₹850 crore capital expenditure (capex) for FY25. This marks a significant step forward in the company’s expansion strategy and reflects its optimism in the wake of recent acquisitions and investments.

During the Q3FY25 earnings call, Craftsman Automation’s Chairman and Managing Director, Srinivasan Ravi, shared the company’s optimistic financial outlook, noting that its revenue is expected to rise from ₹5,500 crore in FY25 to ₹7,000 crore by FY26. The company’s focus on strengthening its core operations through both organic growth and strategic acquisitions is set to fuel this growth. Ravi explained that Craftsman’s key acquisitions and expansions were instrumental in this forecasted growth. These include the ₹250 crore buyout of the remaining 24% stake in DR Axion, an investment of ₹606 crore in Sunbeam, and a ₹154 crore acquisition in Craftsman Germany. These acquisitions, alongside the company’s ongoing projects, will play a pivotal role in driving revenue and expanding market share.

As well as focusing on growth, Craftsman Automation is also expecting significant improvements in its profitability. Consolidated EBITDA is forecasted to increase by 29%, from ₹850 crore to over ₹1,100 crore. Similarly, EBIT is expected to rise by 40%, moving from ₹500 crore to ₹700 crore. These promising figures indicate that Craftsman’s strategies are poised to deliver substantial returns. A key factor in Craftsman’s business strategy is its focus on organic growth and domestic acquisitions. According to Ravi, approximately 90-95% of the company’s investments have been directed towards organic expansion and acquiring local businesses. The company’s commitment to the domestic market is reflected in its high levels of investment in Indian operations, with only a small portion (₹150 crore) allocated to international investments.

Ravi also highlighted the importance of the company’s greenfield project in Bhiwadi, which has already received ₹219 crore of the total ₹850 crore capex allocation. This investment is expected to significantly enhance the company’s production capabilities, bolstering its capacity to meet growing demand in the automotive and industrial sectors. In addition to its acquisitions and expansion efforts, Craftsman Automation is also focused on restructuring its workforce. The company has made significant progress in its Voluntary Retirement Scheme (VRS), with 50% of the employees who opted for VRS having already been relieved by November 2024. The remaining employees are expected to be settled by April or May 2025. This restructuring is part of Craftsman’s long-term strategy to optimise its workforce and ensure operational efficiency.

Meanwhile, the relocation of Sunbeam’s Gurgaon factory is another key development. The move, which is expected to be completed by Q1FY26, will facilitate future growth and create the opportunity to sell the land, further streamlining the company’s operations. As of now, Craftsman Automation has already spent ₹700 crore of its ₹850 crore capex target for the current fiscal year, reflecting a solid commitment to its expansion plans. The remaining funds will likely be directed towards finalising the greenfield project and other critical operational improvements. The company’s strategic allocation of capital is crucial in maintaining its momentum as it aims to increase production capacity and achieve its revenue targets. Craftsman Automation’s robust growth strategy, which combines acquisitions, organic growth, and significant investments in both infrastructure and workforce, places it on track for strong performance in the coming years. With a clear vision and strong operational execution, Craftsman Automation is poised to continue its upward trajectory, achieving its ₹7,000 crore revenue target by FY26 and cementing its position as a leader in the automotive and industrial components manufacturing sector.

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