Craftsman Automation: ICICI Securities Flags Record Growth! BUY Signal & Revised Target Will Shock Investors!

ICICI Securities has reiterated its BUY recommendation for Craftsman Automation Engineering Limited, alongside an increased target price of INR 7,900, up from INR 7,800. This positive outlook follows the company's strong performance in the second quarter of FY26, where consolidated revenue surged by an impressive 65% year-on-year to INR 20 billion, surpassing ICICI Securities' estimates by 10%. The company also achieved an EBITDA margin of 15.1%, a 20 basis points quarter-on-quarter improvement, driven by enhanced operating leverage and effective cost optimization measures.

Looking ahead, ICICI Securities forecasts further margin expansion of approximately 200 basis points between FY25 and FY28. This growth is anticipated from the successful ramp-up of operations at its new manufacturing facilities and gradual profitability improvements at its subsidiary, Sunbeam. Revenue is projected to grow around 15% in FY27 and 12% in FY28, supported by increased business share from existing and new clients, as well as contributions from acquisitions like Sunbeam and Fronberg.

Impact This report significantly impacts Craftsman Automation's stock by reinforcing investor confidence and suggesting substantial future value appreciation. The detailed financial projections and strategic outlook provide a clear roadmap for potential growth, likely influencing trading decisions and market sentiment towards the company. Rating: 8/10.

Difficult Terms Explained: EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operating performance. EBITDAM: EBITDA Margin, calculated as EBITDA divided by Revenue, expressed as a percentage. Operating Leverage: A situation where a company has high fixed costs relative to variable costs. An increase in revenue leads to a proportionally larger increase in operating income. Basis Points (bps): A unit equal to one-hundredth of a percent (0.01%). So, 20 bps is equal to 0.20%. Consolidated Revenue: The combined revenue of a parent company and all its subsidiaries. FY26/FY27/FY28E: Fiscal Year 2026/2027/2028 Estimates, referring to the financial year period for which projections are made.