Craftsman Automation Limited: history, ownership, mission, how it works & makes money

A Brief History of Craftsman Automation Limited

Founded in 1986, Craftsman Automation Limited (CAL) has emerged as a prominent player in the engineering and manufacturing domain in India. The company initially started as a small tool room and has since evolved into a diversified engineering solutions provider with a robust footprint across various industries, including automotive, industrial machinery, and consumer goods.

In 2018, CAL went public with its Initial Public Offering (IPO), raising approximately ₹ 823 crores. The IPO was well-received, with a subscription rate of about 71.67 times the total issue size. This significant response showcased investor confidence in CAL’s growth prospects and operational capabilities.

Throughout its operations, CAL has made substantial investments in technology and automation systems. The company specializes in manufacturing products such as automotive components, industrial equipment, and rail components. With a focus on innovation, CAL has integrated advanced technologies into its manufacturing processes, enhancing efficiency and product quality.

As of FY 2022-23, CAL reported a total revenue of ₹ 1,968 crores, reflecting a growth of approximately 20% compared to the previous fiscal year. The net profit for the same period stood at ₹ 192 crores, a significant increase from ₹ 159 crores in FY 2021-22.

CAL has also expanded its manufacturing capacity over the years. The company operates multiple facilities across India, with a production capacity that exceeds 11 million components annually. This robust capacity supports CAL’s position as a key supplier for leading automotive manufacturers like Mahindra & Mahindra, Honda, and Tata Motors.

The strategic approach adopted by CAL has involved a strong focus on research and development. In FY 2022-23, CAL invested around ₹ 50 crores in R&D initiatives aimed at developing innovative products and solutions to meet evolving market demands.

Here is a summary of key financial metrics for Craftsman Automation Limited over the last three fiscal years:

By embracing automation and honing its engineering capabilities, Craftsman Automation Limited has positioned itself effectively within the competitive landscape of the manufacturing sector. The company’s ongoing expansion initiatives and commitment to innovation continue to drive its success and market presence.

In the stock market, CAL's shares traded at around ₹ 1,592 on October 27, 2023, reflecting a year-to-date return of approximately 15%. This performance indicates a positive investor sentiment and confidence in CAL's growth trajectory within the engineering sector.

A Who Owns Craftsman Automation Limited

Craftsman Automation Limited, listed on the National Stock Exchange of India and the Bombay Stock Exchange, has a diverse ownership structure comprising institutional investors, retail shareholders, and insider holdings. As of the latest data in October 2023, the distribution of shareholding is as follows:

The promoters of Craftsman Automation, primarily the Raghupathi family, have maintained a significant stake in the company since its inception in 1986. As of the latest reports, this family controls approximately 61.82% of the shares, demonstrating a strong commitment to the company's growth and direction.

Institutional investors, comprising mutual funds and insurance companies, own about 20.15% of shares, reflecting robust confidence in the company’s operational capabilities. Noteworthy institutional shareholders include ICICI Prudential Mutual Fund and SBI Mutual Fund.

Foreign Institutional Investors (FIIs) play a vital role as well, owning approximately 7.05% of Craftsman Automation's shares. This stake indicates a growing international interest in the company's performance and potential for growth, particularly within the automotive and manufacturing sectors.

Additionally, non-institutional investors own about 18.03% of the company’s shares, which includes retail investors and employee stock ownership plans. This segment signifies a broader public interest in the firm’s operational trajectory and financial health.

In the fiscal year 2022-2023, Craftsman Automation reported a revenue of approximately ₹1,735 crores with a net profit margin of 10.2%, positioning itself as a key player in the automotive components sector. The company's market capitalization as of October 2023 stood at approximately ₹4,600 crores.

The diversified ownership reflects a healthy mix of stakeholder interests, ensuring balanced governance and strategic oversight. The strong promoter holding typically leads to a focused execution of the company’s growth strategies, particularly in enhancing technological capabilities and expanding product lines.

Craftsman Automation Limited Mission Statement

Craftsman Automation Limited, incorporated in 1986, outlines its mission to deliver value through innovative engineering solutions, contributing to the growth of industries such as automotive, industrial, and energy sectors. The company's commitment is to achieve customer satisfaction through excellence in manufacturing and technology.

The organization operates with a vision of being a global leader in its domain, focusing on continuous improvement and sustainable practices. As of FY 2022, Craftsman Automation reported a revenue of ₹1,478 crore (approximately $200 million), marking a growth of 12.5% compared to the previous fiscal year.

Craftsman Automation’s mission emphasizes quality, safety, and adherence to international standards, thus ensuring competitiveness in global markets. The company employs around 7,000 employees across various locations, fostering a culture of innovation and collaboration.

To gauge Craftsman Automation's operational efficacy, below is a table reflecting key financial figures over the last few years:

In line with its mission, Craftsman Automation has invested heavily in technology and infrastructure, allocating approximately ₹300 crore (around $40 million) for capital expenditures over the last two years, focused on automation and expansion of production capabilities.

The company aims to align its operational strategies with environmental sustainability, incorporating practices that reduce waste and carbon footprint, which resonates with their mission of providing innovative and sustainable solutions.

Craftsman Automation pursues strategic partnerships to enhance its technology offerings. Key collaborations include an alliance with global automotive leaders for advanced projects in electric vehicle components, further emphasizing the company's commitment to innovation and market leadership. In addition, the company has a strong R&D budget constituting about 5% of its annual revenue, positioning it to stay ahead in technological advancements.

With these initiatives, Craftsman Automation Limited envisions not just meeting but exceeding customer expectations while promoting sustainable growth in the manufacturing sector.

How Craftsman Automation Limited Works

Craftsman Automation Limited is a leading engineering company based in India, primarily engaged in manufacturing and supplying components across various industries including automotive, industrial, and railways. The company was founded in 1986 and has since expanded its operations through strategic investments in technology and infrastructure.

The company's business segments can be classified into five key areas: automotive, industrial, railways, aerospace, and engineering services. Each segment plays a crucial role in the company’s revenue generation, with automotive being the largest contributor. In the fiscal year 2022-2023, Craftsman Automation reported a revenue of ₹1,476 crores, reflecting a year-over-year growth of 16%.

Craftsman Automation's manufacturing facilities are strategically located in key regions to optimize supply chain efficiency. As of 2023, the company operates 11 manufacturing plants across India, employing over 3,000 skilled workers. The company has invested heavily in automation and modern manufacturing technology, which has led to enhanced productivity and efficiency in operations.

The company focuses on quality control and has implemented stringent manufacturing standards, ensuring compliance with international quality certifications such as ISO 9001, TS 16949, and AS 9100. These certifications enable Craftsman Automation to cater to global markets, thereby increasing its export footprint significantly.

In terms of financial performance, Craftsman Automation has witnessed consistent growth in profitability. For the fiscal year 2022-2023, the company reported a net profit of ₹142 crores, translating to a net profit margin of 9.6%. The earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at ₹350 crores, with an EBITDA margin of 23.7%.

The company's focus on research and development (R&D) is evident, with an R&D expenditure of approximately ₹45 crores in 2022, aimed at enhancing product innovation and developing new technologies. This R&D investment is essential for maintaining a competitive edge in the dynamic manufacturing landscape.

Moreover, Craftsman Automation has adopted sustainability initiatives, aiming to reduce its carbon footprint. The company reported a 20% increase in energy efficiency in its manufacturing processes over the last year, showcasing a commitment to environmental responsibility.

Looking at the stock performance, Craftsman Automation is listed on the National Stock Exchange of India (NSE) under the ticker symbol "CRAFTSMAN." As of October 2023, the stock price is approximately ₹1,245, representing a market capitalization of around ₹1,500 crores. The company's price-to-earnings (P/E) ratio stands at 10.5, indicating a reasonably valued stock compared to its industry peers.

In conclusion, Craftsman Automation Limited exemplifies a modern engineering company with robust operational capabilities, sound financial management, and a forward-looking approach toward innovation and sustainability. Its strategic focus on different industrial segments ensures that it capitalizes on emerging opportunities in the marketplace.

How Craftsman Automation Limited Makes Money

Craftsman Automation Limited is an Indian manufacturing company specializing in automotive components, industrial machinery, and engineering services. The company generates revenue through various segments, including the production of precision components, manufacturing automation solutions, and the development of engineering services.

Revenue Segmentation

In the financial year 2023, Craftsman Automation reported a total revenue of approximately ₹2,144 crores, marking an increase from ₹1,710 crores in the previous year. The revenue breakdown by segment is as follows:

Automotive Components

Craftsman Automation's core business lies in the automotive sector, where it manufactures a wide range of precision components including engine blocks, transmission cases, and automotive parts. In FY 2023, this segment contributed ₹1,393 crores to total revenue, driven by the growing demand for electric vehicles (EVs) and fuel-efficient automobiles. The company has reported a consistent growth rate of approximately 18% annually in this segment.

Industrial Machinery

The industrial machinery segment accounted for ₹631 crores of revenue in FY 2023. Craftsman Automation focuses on manufacturing automation solutions, which are essential for various industries including manufacturing, textiles, and metal processing. This segment has seen growth fueled by the adoption of Industry 4.0 practices among Indian manufacturers.

Engineering Services

The engineering services segment, while smaller, plays a crucial role in adding value to the company’s offering. It generated ₹120 crores in FY 2023. The services include product design, prototyping, and project management, making Craftsman a preferred partner for several OEMs looking to innovate.

Cost Structure and Profitability

Craftsman Automation maintains a cost structure that allows for competitive pricing while ensuring healthy margins. In FY 2023, the company’s EBITDA stood at ₹490 crores, with an EBITDA margin of 22.8%. The net profit for the year was approximately ₹276 crores, reflecting a profit margin of 12.9%. Key factors influencing profitability include operational efficiency and strategic sourcing of raw materials.

Market Trends and Future Outlook

The automotive components market in India is projected to grow at a CAGR of around 11% over the next five years. Craftsman Automation is well-positioned to benefit from this trend, particularly with the increasing emphasis on EV components. The company's investment in advanced manufacturing technologies and sustainable practices positions it for continued growth.

The global industrial automation market is expected to reach approximately USD 300 billion by 2026, and Craftsman is strategically targeting this growth through innovation in machinery and automation solutions.

Conclusion

Through diversified revenue streams, strategic positioning in the automotive and industrial sectors, and an emphasis on innovation, Craftsman Automation Limited continues to sustain and grow its financial performance in a competitive landscape.