Q1 2027 Craftsman Automation Ltd Earnings Call Transcript
Key Points
- Aluminum segment is on a strong growth path with new capacities maturing, expected to outperform other segments for many quarters.
- Heavy horsepower engine business has secured orders from four customers, with a fifth order imminent, filling the initial $100 million revenue target for FY29-30.
- Industrial segment (material handling and storage) is seeing an upswing in demand with improving margins due to operating leverage.
- Sunbeam restructuring is nearly complete, with expectations of mid-teens EBITDA margins by Q4 FY27 as low-margin legacy businesses are exited.
- Strong order pipeline for Kothavadi foundry, with potential to exceed the $100 million revenue target as new inquiries come in.
- Powertrain segment growth is described as 'muted' returning to normal, not a strong trend, with capacity utilization averaging only around 70%.
- Sunbeam revenue is expected to decline by 10-20% as low-margin businesses are exited, with restructuring delayed due to customer requests.
- Material cost increases are not fully passed through to all customers, with some taking time to adjust, impacting margins.
- High capital expenditure requirements (INR 1,500 crore consolidated) are driven by rising land, construction, and machinery costs, which are 5-7 times higher than in 2016.
- New heavy horsepower engine production will not contribute significantly to revenue until FY28, with full revenue only expected by FY30, indicating a long gestation period.
Ladies and gentlemen, good day and welcome to the earnings conference call of Craftsman Automation Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the opening remarks are concluded.
(Operator Instructions)
I now hand the conference over to Mr. Srinivasan Ravi, Chairman and Managing Director of Craftsman Automation Limited.
Thank you. And over to you, Mr. Ravi.
Good afternoon, everybody.
Thank you very much for joining the earnings call for Q1 FY27.
I will leave the floor open for questions. Kindly proceed with the questions.
Questions & Answers
(Operator Instructions)
Please note that some of the statements made during this earnings conference call may constitute forward-looking statements, which are subject to risks and uncertainties and are not guarantees of future
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