Goal: 2,655

CMP: ₹ 2,030

The dominance in the machining of critical drive train components, the versatility in aluminum die casting and the growth promise good conditions for Craftsman Automation for strong growth in the next 2-3 years. Since growth is a function of capital formation in the country, Craftsman’s industrial and engineering division is expected to grow strongly due to the expected surge in investment.

Craftsman’s dominance in machining engine core components for M & HCVs, growth opportunities in aluminum die-cast verticals, and its growing industrial business bode well for its strong sales and operational growth over the next 2-3 years.

Given the expected strong M&HCV growth, aluminum casting orders and investment growth at the country level, we expect the company to achieve CAGR sales of 19 percent versus FY 21-23 at 2,200 crore. Profitability expansion and de-levering in progress. Against the background of strong sales growth in all industries, we expect the EBITDA margin to increase to 29 percent by FY23.

Additionally, we expect earnings growth to outperform EBITDA growth in FY23 due to subdued capital spending, reduced debt, and the company’s move to the lower tax regime. With the expected sales CAGR of 19 percent in FY 21-23, we expect EBITDA growth of 21 percent and an earnings CAGR of 70 percent to 280 billion, resulting in earnings per share of 2.7 132.7.


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