Craftsman Automation up 4% as Marina III Singapore sells entire 5.5% stake

India Acorn Icav (333,363 shares), Abu Dhabi Investment Authority (240,300 shares) and White Oak Capital Management Consultants LLP (128,959 shares) bought more than 100,000 shares of the company.

Shares of Craftsman Automation were up 4 per cent at Rs 3,391.65 on the BSE in Wednesday’s intra-day trade after Marina III (Singapore) Pte offloaded its entire 5.5 per cent stake in auto ancillary company via open market.

On December 6, Marina III (Singapore) Pte sold 1.16 million shares representing 5.5 per cent of total equity of Craftsman Automation for Rs 370 crore via block deal on the BSE, the exchange data shows. The foreign company sold these shares at price of Rs 3,200 per share, data shows.

India Acorn Icav (333,363 shares), Abu Dhabi Investment Authority (240,300 shares) and White Oak Capital Management Consultants LLP (128,959 shares) bought more than 100,000 shares of Craftsman Automation via block deals, data shows.

Meanwhile, in past one week, the stock price of company has appreciated by 11.5 per cent, as compared to 1 per cent decline in the S&P BSE Sensex. It had hit a record high of Rs 3,463 on November 11, 2022.

Craftsman Automation is engaged in the business of manufacturing engineering components, sub-assemblies, products and rendering of contract manufacturing services to various industries. The company manufactures several components and sub-assemblies on supply and job-work basis according to client specifications in the automotive, industrial and engineering segments. Key products in the automotive segment include power train products, cylinder blocks, cylinder heads, cam shafts and crank cases for CVs, sports utility vehicles, two-wheelers, farm equipment and earthmoving and construction equipment.

The company also has a non-ferrous sand foundry catering to power transmission equipment manufacturers, and its industrial and engineering segments have a wide range of products, including industrial gears, storage solutions, material handling and locomotive engine components. The company has a tool room that supplies dies for injection moulding and mould base. Moreover, it manufactures special-purpose machines for metal and non-metal cutting.

For H1FY23 (April-September), Craftsman Automation reported a strong 60.9 per cent year-on-year (YoY) growth in its consolidated profit after tax (PAT) at Rs 119 crore, on back of healthy revenue growth. The company’s revenue from operation rose 44.4 per cent YoY at Rs 1,453 crore.

Continued modernisation of trucks from medium tonnage to high tonnage post revised axle norms in FY 2019, will continue to increase requirement for higher number of axles per truck, gearboxes and other critical components. This along with increased outsourcing by original equipment manufacturers (OEMs) will strengthen Craftsman Automation’s market position further, Crisil Ratings said in July 2022 rationale.

Furthermore, expected increase in the aluminium content in vehicles owing to the light-weighting trend driven by emission and efficiency norms and EV transition should augur well for the company. Demand for storage solutions is also expected to improve with increase in demand from warehousing and retail sectors. Operating margins are expected to improve over the medium term with benefits of higher volumes and cost reduction initiatives such as automation in overall operations of the company, the rating agency said.