Craftsman Automation Limited , a prominent player in the manufacturing sector, has made a strategic move into the renewable energy space by investing in Eastsquare Energy India Private Limited (EEIPL). The company has acquired a 26% stake in EEIPL, marking its entry into the solar power segment under the Group Captive Scheme.

Investment Details

Craftsman Automation has invested Rs 2.60 lakh to acquire 26,000 equity shares of EEIPL, each with a face value of Rs 10. This investment gives Craftsman a 26% shareholding in the solar power company. The transaction was completed through cash consideration, as disclosed in a regulatory filing.

Purpose of Investment

The primary objective behind this investment is to facilitate the purchase of solar power under the Group Captive Scheme, in compliance with the Electricity Act, 2003. This move aligns with the growing trend of manufacturing companies investing in renewable energy sources to meet their power needs more sustainably and cost-effectively.

About Eastsquare Energy India Private Limited

EEIPL, the company in which Craftsman has invested, is a relatively new player in the power generation and transmission business. Key details about EEIPL include:

• Incorporation Date: September 26, 2023
• Registered Office: S.F.No.43/2, D.No.1/689, SAP Western City, Chettipalayam Road, Chinnia Gounden Palayam, Panickampatti, Coimbatore, Palladam – 641664, Tamil Nadu
• Authorized Capital: Rs 15.00 lakh
• Paid-up Capital: Rs 10.00 lakh
• FY 2024-25 Turnover: Rs 61.76 crore

Transaction Insights

Craftsman Automation has clarified that this investment does not fall under the category of related party transactions. The company has also confirmed that none of its promoters, promoter group, or group companies have any interest in EEIPL.

Regulatory Compliance

The investment has been made in accordance with the provisions of the Electricity Act, 2003, and does not require any specific governmental or regulatory approvals.

Conclusion

This strategic investment by Craftsman Automation Limited in the solar power sector through EEIPL demonstrates the company's commitment to sustainable energy solutions. By participating in the Group Captive Scheme, Craftsman aims to optimize its energy costs while contributing to the growth of renewable energy in India's industrial sector.

Craftsman Automation Limited , a leading engineering company, has reported strong financial results for the first quarter, showcasing resilience in a challenging market environment. The company maintained its full-year guidance, signaling confidence in its growth trajectory.

Key Financial Highlights

• Consolidated EBITDA margin stood at 15%
• Net debt to EBITDA ratio improved to 2.27
• Standalone aluminum segment revenue grew by 56% year-on-year

Segment Performance

Powertrain

The Powertrain segment demonstrated resilience, with margins improving to 15.2% despite industry slowdown. This improvement was attributed to optimized costs and stable operations following previous quarters' modernization and maintenance activities.

Aluminum

The aluminum segment showcased significant growth, with standalone revenue increasing by 56% year-on-year. This growth was driven by both traditional aluminum operations and the ramp-up of the alloy wheel facility in Bhiwadi.

Subsidiaries Performance

• DR Axion: Revenue of INR 408.00 crores
• Sunbeam: Revenue of INR 291.00 crores
• Craftsman Germany: Revenue of INR 67.00 crores

Strategic Developments

1. Sunbeam Integration: The company successfully completed the closure of Sunbeam's Gurgaon plant and equipment relocation, marking a significant milestone in its integration strategy.

2. Kothavadi Plant: The new facility has secured over 50% of its $100 million revenue target for 2030, with production expected to commence in FY27.

3. Alloy Wheel Business: The Bhiwadi plant has turned EBITDA positive, contributing approximately 13% to the standalone aluminum segment revenue.

Future Outlook

Craftsman Automation's management maintains its full-year guidance of INR 70 billion in revenue and INR 11 billion in EBITDA. The company plans a consolidated capex of INR 800.00 crores, targeting a 20-25% growth rate.

Srinivasan Ravi, Chairman and Managing Director, commented on the results, stating, "We are on track with our growth plans, and our diversified business model continues to show resilience. The improvement in our net debt to EBITDA ratio demonstrates our commitment to financial prudence while pursuing growth opportunities."

Debt Management

The company reported a consolidated net debt of INR 2,400.00 crores. Management emphasized its focus on maintaining a healthy net debt to EBITDA ratio, aiming for a comfortable range of 1.5 to 2.

Conclusion

Craftsman Automation's strong Q1 performance, particularly in the aluminum segment, underscores its robust business model. With strategic investments in new facilities and ongoing integration efforts, the company appears well-positioned to capitalize on growth opportunities in the engineering sector.

Investors will be watching closely to see if the company can maintain its growth momentum and achieve its full-year targets amidst evolving market conditions.