Craftsman Automation Limited

Consumer Cyclical — Auto Parts · NSE

₹10,967.00+₹26.00 (+0.24%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by moderate debt load, negative free cash flow, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Craftsman Automation Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Craftsman Automation Limited operates as an engineering company in India. It operates through Powertrain, Aluminium Products, and Industrial & Engineering segments.

IndustryAuto Parts

SectorConsumer Cyclical

Annual revenue₹8,004 Cr

How does it make money?

Turns over ₹8,004 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation.

EBITDA margin15.9%

Net margin4.8%

Who are its competitors?

The closest listed comparisons in its industry are BOSCH LIMITED, MARUTI SUZUKI INDIA LTD., TVS MOTOR COMPANY LTD, EICHER MOTORS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

BOSCH LIMITEDP/E 56.9x · ROE 15.9%

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TVS MOTOR COMPANY LTDP/E 56.8x · ROE 35.8%

EICHER MOTORS LTDP/E 34.7x · ROE 23.0%

What is its competitive advantage?Little sign of one

Returns on capital of 14.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE14.0%

ROE11.8%

Peer median ROE23.0%

What is the outlook?

8 analysts covering the stock expect revenue to grow about 103.6% and earnings to grow about 36.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+103.6%

Est. earnings growth+36.5%

Analysts8

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +153% while net margin moved -39% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+153%

Margin effect-39%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 56.5x is demanding — it needs sustained high growth to justify
✗ P/E is 23% above its own historical median of 46.0x — expensive by its own standards
✗ P/B of 8.02x is a steep premium to book

Quality vs. Valuation

Company Quality

52/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

23/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

56.5x

3Y Median

46.0x

40 monthly readings · mean 57.9x · range 29.0x–118.0x

Sector Median

45.7x

median of 4 sector peers

⚠️Current valuation is approximately 23% above its 3y median of 46.0x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 24% above the peer median of 45.7x.

vs. its own history

Expensive

46.0x median over 40 months · +23%

vs. sector peers

Expensive

45.7x median of 4 peers · +24%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

56.5x

P/B

8.02x

EV/EBITDA

25.3x

PEG

3.62

Dividend Yield

0.10%

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Margins are compressing
EBITDA margin has slipped from 21.5% to 15.9% over 3 years.
Debt is rising
Total debt is up 192% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 18.0% to 11.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.8% to 14.0% — often a sign of competition or overexpansion.
Valuation above its historical average
At 56.5x the stock trades 23% above its own median of 46.0x.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 192% over 3 years, from ₹1,240 Cr to ₹3,623 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.6 points, from 21.5% to 15.9%.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 21.5% to 15.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 23% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 18.0% to 11.8%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 27% a year✓ 36.2% CAGR
Latest reported year was 36.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 14%✓ 15.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹667 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.8x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

5 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 5 neutral · 3 weak

Market Cap

₹28,684 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

56.5x

Expensive

Expensive — verify against sector peers

P/B Ratio

8.02x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹194.04

Profitable

Profitable on a per-share basis

ROE

11.8%

Moderate

Moderate capital efficiency

ROCE

14.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.11x

Moderate

Moderate leverage

Revenue Growth (YoY)

36.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

113.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.10%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹667 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹10,967

P/E (Forward)

31.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

10.8%

Average

Average margins

Net Margin

5.3%

Average

Average bottom-line conversion

Current Ratio

1.18

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.37

Defensive

Steadier than the market

52W Range Position

82%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

10611.1 / 10783.3

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

55.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,165 Cr	₹4,421 Cr	₹5,645 Cr	₹8,004 Cr	+36.2%
EBITDA	₹680 Cr	₹892 Cr	₹855 Cr	₹1,271 Cr	+23.1%
EBITDA Margin	21.5%	20.2%	15.1%	15.9%	—
PAT (Net Profit)	₹248 Cr	₹304 Cr	₹195 Cr	₹384 Cr	+15.6%
EPS	₹117.56	₹144.11	₹83.68	₹160.96	+11.0%
ROE	18.0%	18.4%	6.8%	11.8%	—
ROCE	17.8%	19.4%	10.1%	14.0%	—
Total Debt	₹1,240 Cr	₹1,755 Cr	₹2,358 Cr	₹3,623 Cr	+43.0%
Free Cash Flow	₹262 Cr	-₹118 Cr	-₹708 Cr	-₹667 Cr	—

🟢 Revenue has grown at 36.2% a year over 3 years.

🟢 EBITDA has grown at 23.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 21.5% to 15.9% over 3 years (-5.6 pts).

🟢 PAT (Net Profit) has grown at 15.6% a year over 3 years.

🟢 EPS has grown at 11.0% a year over 3 years.

🔴 ROE has fallen from 18.0% to 11.8% over 3 years (-6.3 pts).

🔴 ROCE has fallen from 17.8% to 14.0% over 3 years (-3.8 pts).

🔴 Total Debt has grown at 43.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹262 Cr to -₹667 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8,978 Cr

Total Liabilities

₹5,714 Cr

Total Debt

₹3,623 Cr

Cash & Equivalents

₹145 Cr

Operating Cash Flow

₹522 Cr

Capex

-₹1,188 Cr

Shareholding (proxy)

Institutional Holding

40.7%

Insider Holding

42.4%

Corporate Actions

Dividend Rate

₹11.25

Ex-Dividend Date

16 Jul 2026

Analyst Consensus

Recommendations

6 Buy · 2 Hold · 0 Sell

Target Price (Mean)

₹11,510.38

+5.0% vs CMP

Target Range

₹9,513 – ₹13,000

Peer Comparison

Company	P/E	ROE
BOSCH LIMITED	56.9x	15.9%
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TVS MOTOR COMPANY LTD	56.8x	35.8%
EICHER MOTORS LTD	34.7x	23.0%

Recent News

4 mixed2 general

CRAFTSMAN Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Craftsman Automation Q1FY27 Results: Earnings call scheduled for Oct 29

scanx.trade, 14 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Craftsman Automation stock offers buy-on-dips opportunity, says analyst; shares price target

Business Today, 09 SeptAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Craftsman Automation (BSE:543276) - Stock Analysis

Simply Wall Street, 10 Oct

Craftsman Automation shares soar 4% to 52-week high on raising ₹2,000 crore via QIPs; check details

Upstox, 18 JunFunding

🟡Mixed / dependsNew funding changes the capital structure. Debt raises leverage; an equity raise dilutes existing holders.

Block deal alert! Craftsman Auto shares in focus as promoter to sell stake worth Rs 486 crore

The Economic Times, 23 Jun

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate9/20

🔴Financial HealthStretched8.7/20

🟢GrowthStrong14.7/20

🟡ProfitabilityModerate7.1/15

🔴ValuationDemanding3.3/15

🟡RiskModerate5.8/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 27% a year36.2% CAGR
✓EBITDA margin holds above 14%15.9%
✗Debt / EBITDA stays below 2x2.9x
✗Free cash flow remains positive-₹667 Cr
✗Interest cover stays above 3x2.8x