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Craftsman Automation, a diversified engineering company supplying parts to automotive and industrial sectors, has chalked out a four-pronged strategy to achieve profitable growth going forward amid short term headwinds due to the second wave.
The Coimbatore-based company, which generated ₹150 crore through an IPO in FY21, is engaged in three business segments that include automotive powertrain, automotive aluminium and industrial and engineering.
Under its blueprint for future growth, the company will leverage its manufacturing and engineering capabilities, increase wallet share and acquire new business, capitalise on opportunities in the storage space and reduce operating costs and improve operational efficiencies.
The company seeks to capitalise on the growing opportunities and emerging trends in the automotive aluminium products segment. It will also focus on manufacturing certain critical power transmission components, including castings for gas insulated switchgear in the industrial & engineering segment.
BS-VI norms
Auto segment’s shift to BS-VI norms is expected to spur growth for non-ferrous materials for lightweighting of vehicles. “The shift to the BS-VI norms in FY21 has opened significant opportunities. Our initial efforts in aligning with this new standard have yielded heartening business returns. I am confident that our initial success will provide more interesting growth opportunities over the coming years,” Srinivasan Ravi, Chairman & Managing Director of the company said in the company’s latest annual report.
The ₹1,546 crore-worth company eyes an early mover advantage in certain segments and plans to leverage long-term relationships with customers, some of whom are more than 10 years old. It will also explore opportunities that could arise from key government announcements such as Make in India, Atmanirbhar Bharat, among others.
Under the industrial & engineering division, it forayed into the high margin storage solution with a slew of products that cater to the warehousing sector.
It will establish a presence in the warehouse space and other end-user sectors such as e-commerce, organised retailing, consumer durables, auto components and pharmaceuticals as well as cold storage space. Storage solutions business now accounts for one-fourth of the company’s industrial segment.
“With the rapid growth of e-commerce across verticals (retail, groceries, pharma and many other spaces), organised warehousing is gaining traction. This augurs well for our storage solutions vertical. Moreover, we have rejuvenated our product offering in this vertical with additional features and customised solutions. We hope to build this vertical in coming years,” said Ravi.
The company, which has 12 plants at strategic locations across the country, has reduced its debt from ₹1,040 crore to ₹704 crore in FY21 with the help of IPO proceeds and significant internal accruals amid the pandemic situation . It is targeting a further debt reduction of ₹200 crore during this fiscal.
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