- Craftsman Automation is a diversified engineering company that has vertically integrated manufacturing capabilities
- The company operates in three key business segments:
- Powertrain and other products aimed towards the automotive segment (48% of revenue in Fiscal 2020)
- Aluminium products for the automotive segment (17% of revenue in Fiscal 2020)
- Industrial and engineering products segment (35% of revenue in Fiscal 2020)
- Largest player in the machining of cylinder blocks/heads in commercial vehicles and the construction equipment industry in India
- Placed amongst the top-five component manufacturers for the machining of cylinder block tractor segment in India
- Long-term relationships with several marquee domestic and global original equipment manufacturers (OEMs) and component manufacturers across the business segments
- Top ten customers account for 50-60% of revenues, mainly under long-term agreements providing revenue consistency
- 12 strategically located manufacturing facilities across seven cities in India
Craftsman Automation began its operations in 1986 in Coimbatore, Tamil Nadu. The company is present across the entire value chain in the Automation-Aluminium products segment. Its comprehensive solutions include design, process engineering and manufacturing. The manufacturing consists of the foundry, heat treatment, fabrication, machining and assembly facilities.
Craftsman Automation Limited IPO opens for subscription between March 15 to March 17, 2021. With diverse and technically advanced manufacturing capabilities and a robust financial profile, this company is worth a place in the portfolio.
Product profile across business segments
Highly engineered products form a part of the Automotive-Powertrain segment. These products include engine parts such as cylinder blocks and cylinder heads, camshafts, transmission parts, gearbox housings, turbochargers and bearing caps.
End users for the company’s products include Original Equipment Manufacturers (OEMs) producing commercial vehicles, special utility vehicles, tractors and off-highway vehicles.
Craftsman Automation has various processes in the Automotive-Aluminium segment, including high and low-pressure die casting and gravity die casting machines. These machine manufacture components, machining tools for machining and assembly lines.
The company manufactures highly engineered products in this segment. They include crankcase and cylinder blocks for two-wheelers, engine and structural parts for passenger vehicles and gearbox housing for the heavy commercial vehicle.
Craftsman utilized its in-house engineering and design capabilities to develop a diverse product portfolio in the Industrial and Engineering segment.
There are two sub-segments:
- Storage solutions sub-segment which provides a complete solution for conventional automated storage
- High-end precision products segment under which the company manufactures aluminium products for power transmission, high-end precision products, and undertakes sub-assembly work.
Promoter of Craftsman Automation
The company’s promoter Srinivasan Ravi is a mechanical engineer and first-generation entrepreneur. He has over 34 years of relevant industry experience.
Financial Profile
Below is the condensed financial information of Craftsman Automation Limited.
All amounts in Rs Cr excluding per share data
- Robust revenue growth and healthy margins
- Strong return on net worth
Comparison with listed peers
Below is the comparison of Craftsman Automation Limited with its peers across valuation and financial performance measures.
Valuation metrics
Financial performance metrics
- As per the company, the relevant industry composite P/E ratio is 72.8x
Offer proceeds
| Particulars | Amount |
| Fresh issue of eq. shares | Rs 150.0 Cr |
| Offer for sale of 45,21,450 eq. shares | Rs 673.7 Cr |
| Gross issue size | Rs 823.7 Cr |
Utilization of proceeds from the fresh issue of shares:
- Repayment/pre-payment, in full or part, of borrowings
- General corporate expenses
IPO Factsheet
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The information provided in the red herring prospectus filed by the company with the Securities and Exchange Board of India (www.sebi.gov.in) is the basis for this note. However, I recommend that the reader validate the data before making any financial decision. Also, investment in an initial public offering (IPO) is subject to market risks. It should be evaluated, keeping your risk profile and investment objective in mind. The author will not be responsible for any financial loss or otherwise resulting from any action taken based on the above.
The author is a senior finance professional with over fifteen years of work experience in corporate finance and has an affinity for personal finance and investment management. Please leave your comment or share thoughts on this article via email at decodefinance.in@gmail.com. For more articles, please visit the website www.decodefinance.in
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