Craftsman Automation expands Capex for FY 2024

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Craftsman Automation expands Capex for FY 2024

Craftsman Automation expands Capex for FY 2024

Industry News
Nov 09,23

Craftsman Automation has outlined a new investment plan totalling Rs 209 crore, with Rs 150-160 crore allocated for the current fiscal year.

Craftsman Automation expands Capex for FY 2024

Craftsman Automation Ltd, a versatile engineering company supplying components to the automotive and industrial sectors, has increased its planned capital expenditure (capex) for the fiscal year 2024 by an additional Rs 150-160 crore, bringing the total to Rs 470-480 crore. This decision stems from the company's strategy to establish a new greenfield unit in Coimbatore, seizing the emerging opportunities arising from the China +1 and Make in India initiatives.

Srinivasan Ravi, the Managing Director of the company, revealed during the Q2FY24 earnings call, "We had initially projected a capex of about Rs 320 crore for this fiscal year. However, due to significant prospects in the powertrain and aluminium businesses, driven by geopolitical factors and the make-in-India policy, we foresee substantial growth. The government is introducing various policies to decrease imports and prevent dumping from other countries. Consequently, we are preparing for this scenario."

Craftsman Automation has outlined a new investment plan totalling Rs 209 crore, with Rs 150-160 crore allocated for the current fiscal year, to establish a new manufacturing complex near Coimbatore. The proposed factory will be situated on the company’s 48-acre site at Kothavadi, in close proximity to the existing facility. Both plants, located within 45 km of each other, will facilitate seamless operational synergy.

Ravi elaborated, "We are proceeding with the Greenfield project near our main plant in Coimbatore. This new facility will serve as a foundation for future expansions across our three core businesses – automotive powertrains, aluminium products, and industrial and engineering."

In the first half of the fiscal year, the company invested Rs 258 crore in existing business expansion, incorporating technology upgrades and automation efforts. Craftsman Automation anticipates high single-digit to low double-digit growth in the automotive powertrain business over the next two years, with rapid expansion expected in FY26. The company is actively working on an export order with a major client, scheduled to commence in FY26, and is enhancing its capacities to meet the demand in the off-highway segment.

Ravi emphasised the company's focus on the off-highway segment, stating, "While we are expanding our presence in the commercial vehicle business for international markets, directly or indirectly, the off-highway segment holds significant potential. This is particularly true given the current geopolitical situation and the need to reduce dependence on China."

In the aluminium die-casting business, Craftsman Automation is in the process of ramping up operations. Additionally, the industrial and engineering segment, which includes storage solutions, high-end sub-assembly, contract manufacturing, and other non-automotive verticals, experienced a temporary slowdown in the storage solution business during the first half of the fiscal year. However, the outlook for H2 is optimistic, with an order book worth Rs 100 crore in automated storage solutions.

Source: Business Line