Craftsman Automation (CRAFTSMAN) Q2 24/25 earnings summary

Executive summary

• H1 performance was slightly lower year-over-year due to extraordinary expenses from two new plants and major acquisitions, but strategic moves are expected to drive future growth.

• Three major acquisitions completed: Fronberg (Germany), Sunbeam (India), and DR Axion, expanding global customer base and operational synergies.

• Sunbeam acquisition transitioned from an asset deal to a full company buyout, with CCI approval in late September and consolidation from October.

• Consolidated revenue from operations for Q2 FY25 was ₹121,395 lakhs, up from ₹115,119 lakhs in Q1 FY25 and ₹117,906 lakhs in Q2 FY24.

• Profit for the period stood at ₹6,169 lakhs, compared to ₹5,949 lakhs in Q1 FY25 and ₹10,449 lakhs in Q2 FY24.

Financial highlights

• H1 EBITDA dropped 8-10% year-over-year, mainly due to unallocated expenses from new plants and acquisition-related costs.

• Sunbeam's revenue is around INR 1,200 crore, with negative EBITDA for the past 3-4 years; turnaround expected with labor settlements and operational synergies.

• Standalone aluminum margins declined to 11.8% from 13.2% last quarter, mainly due to Bhiwadi plant expenses.

• Basic and diluted EPS for Q2 FY25 were ₹27.10, compared to ₹27.29 in Q1 FY25 and ₹44.10 in Q2 FY24.

• Net cash from operating activities for H1 FY25 was negative at ₹36,452 lakhs, compared to positive ₹16,796 lakhs in H1 FY24.

Outlook and guidance

• No formal revenue guidance, but consolidated revenue expected to surpass INR 7,000 crore in the next financial year.

• Sunbeam's EBITDA expected to turn marginally positive in Q4, with high single-digit or low double-digit EBITDA targeted next year.

• Bhiwadi plant to reach 50-70% capacity in Q4; Kothavadi plant under trial production.

• Management completed a QIP raising ₹120,000 lakhs, fully utilized for debt repayment, acquisition, and general corporate purposes.

• Strategic acquisitions in Germany and full ownership of DR Axion India Private Limited are expected to enhance future growth.