Craftsman Automation (CRAFTSMAN) Q3 25/26 earnings summary

Executive summary

• Diversified engineering company with three main business verticals: Powertrain, Aluminum Products, and Industrial Engineering, serving commercial vehicles, passenger vehicles, two-wheelers, farm equipment, and off-highway vehicles.

• Operates 25 manufacturing facilities across India and Germany, with a total built-up area of over 3.4 million sq. ft.

• Achieved highest-ever 9M FY26 revenue of ₹5,843 crores and EBITDA of ₹922 crores.

• Aluminum segment margins declined sequentially due to operational losses from a new plant startup and volatile commodity prices, but are expected to improve as production ramps up by Q2 next year.

• Market capitalization increased from ₹2,996 crores to ₹18,261 crores as of December 31, 2025.

Financial highlights

• 9M FY26 revenue grew 48% year-over-year to ₹5,843 crores; EBITDA rose 51% to ₹922 crores; PAT more than doubled to ₹268 crores.

• Q3 FY26 revenue was ₹2,057 crores, up 31% year-over-year; EBITDA at ₹340 crores, up 64%; PAT at ₹108 crores, more than double year-over-year.

• Operating margin has hovered around 15-16% for the last two quarters, impacted by new plant additions and aluminum margin contraction.

• Net debt to EBITDA stands at 2.5x on a consolidated, annualized nine-month basis.

• Return on capital employed (pre-tax) is around 16%, and ROE is about 12% annualized.

Outlook and guidance

• Aluminum margins are expected to improve from Q4 onwards as new plant utilization increases, with 60-70%+ utilization targeted by Q3 next year.

• Recent acquisitions and greenfield expansions are expected to further strengthen market position and operational capabilities.

• Industrial & Engineering and Powertrain segments are expected to grow at high single to low double digits, while Aluminum Products may see growth in the high teens over the next couple of years.

• Debt to EBITDA is targeted to reduce to 1.5x in the medium term, aided by potential land sales and continued growth.

• Management notes that results for the current period are not directly comparable to the previous year due to acquisitions and business expansion.