Craftsman Automation received a credit rating reaffirmation from CRISIL Ratings Limited on December 12, 2025, maintaining its strong position in the auto-engineering contract-manufacturing sector. The rating agency reaffirmed the AA-/Stable rating for long-term facilities and A1+ rating for short-term facilities while significantly enhancing the company's bank loan facilities.

Rating Enhancement and Financial Metrics

CRISIL enhanced Craftsman Automation's total bank loan facilities substantially, reflecting the company's growing business requirements and strong credit profile.

For subsidiary DRAxion India Private Limited, CRISIL also reaffirmed ratings while enhancing facilities to ₹525.00 crores from ₹313.97 crores, maintaining the same AA-/Stable and A1+ ratings.

Strong Business Performance Drives Rating Confidence

The rating reaffirmation reflects robust business performance, particularly in the aluminum segment which has significantly improved overall revenues. Consolidated operating revenues increased to ₹3,786.00 crores during the first half of fiscal 2025 from ₹2,365.00 crores in the previous corresponding period, primarily driven by 26.00% revenue growth in standalone operations.

The aluminum segment demonstrated exceptional growth of 41.00% in the last fiscal, contributing significantly to overall revenue growth of 28.00% to ₹5,693.00 crores from ₹4,452.00 crores in fiscal 2024.

Operational Excellence and Market Position

Craftsman Automation maintains its established position across diversified customer relationships in the auto-engineering space. The company operates through three main business segments: powertrain products serving commercial vehicles and passenger vehicles, aluminum products for two-wheeler and four-wheeler manufacturers, and industrial engineering solutions.

Operating margins remained healthy at 15.00% in the first half of fiscal 2026, compared to 16.50% in the previous corresponding period. The slight moderation was attributed to lower contribution from subsidiaries Sunbeam Lightweighting Solutions Private Limited (SLSPL) and Craftsman Germany, while core operations at Craftsman Automation and DRAxion maintained strong margins.

Financial Risk Profile and Capital Management

The company's financial metrics demonstrate adequate debt management despite increased capital expenditure requirements. Key financial indicators show measured debt levels with strategic capital allocation.

Debt levels are expected to rise to ₹3,500.00 crores by end of fiscal 2026 from ₹2,141.00 crores as of March 31, 2025, mainly due to increased working capital requirements and capital expenditure of ₹1,200.00 crores for modernization and expansion projects.

Strategic Acquisitions and Expansion

The company successfully completed fund raising of ₹1,200.00 crores through Qualified Institutional Placement in June 2024, utilizing proceeds for debt reduction of over ₹650.00 crores and strategic acquisitions. Recent acquisitions include SLSPL and increased shareholding in DRAxion to 100.00%, enhancing manufacturing capabilities and customer base.

Outlook and Rating Sensitivity

CRISIL maintains a stable outlook based on Craftsman Automation's established market position, strong customer relationships, and healthy operating efficiency. The rating agency expects gradual improvement in debt metrics over the medium term through higher cash accruals, managed capital expenditure plans, and potential asset monetization.

The ratings remain sensitive to sustained business performance, prudent capital spending, and maintenance of debt metrics within acceptable ranges. Any significant debt-funded expansion or material deterioration in operating performance could impact the rating profile.

Craftsman Automation has announced a strategic partnership with Viksha Green Energy for solar power investment, marking the company's entry into the renewable energy sector.

Partnership Details

The collaboration between Craftsman Automation and Viksha Green Energy focuses on solar power investment opportunities. This partnership aligns with the growing trend among manufacturing companies to adopt sustainable energy solutions and reduce their carbon footprint.

Strategic Implications

This move into renewable energy represents Craftsman Automation's commitment to sustainable business practices. The solar power investment is expected to support the company's long-term energy requirements while potentially reducing operational costs associated with conventional energy sources.

Company Background

Craftsman Automation operates in the auto ancillaries sector and has been expanding its business operations across various segments. The company's decision to partner with Viksha Green Energy demonstrates its focus on incorporating environmentally sustainable practices into its operational framework.

Industry Trend

The partnership announcement comes as more companies in the manufacturing sector are exploring renewable energy options to meet their power requirements and sustainability goals.