Craftsman Auto Q1 FY27 Results (NSE: CRAFTSMAN)
Signal: Margin expansion
The read
Margins inflected to 16% OPM (200bps YoY) after five consecutive quarters of contraction, driven by operating leverage (employee cost +14.8% vs revenue +36.4%, depreciation +18.2%). Revenue growth accelerated to 36.4% YoY (vs 27.3% in Q4FY26), with Aluminium Products and Industrial & Engineering leading. PAT growth (116%) was amplified by other income (₹23 Cr vs ₹5 Cr). The QIP completed in June 2026 raised ₹2,000 Cr, diluting EPS but strengthening balance sheet for future capex/debt reduction. The 2nd consecutive quarter of margin expansion signals a potential turnaround from the prolonged margin pressure seen in FY24-FY25.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,431.58 Cr | 36.4% | 9.2% |
| EBIT | ₹287.18 Cr | 15.0% | |
| Net profit | ₹150.55 Cr | 116.3% | |
| EPS | ₹62.25 | 113.3% | |
| EBIT margin | 15.7% |
P&L walk
Revenue grew 36.4% YoY, accelerating from Q4FY26's 27.3%; margin structure improved: cost of sales % dropped 170bps, employee cost % dropped 130bps, depreciation % dropped 70bps — operating leverage evident as fixed/semi-fixed costs grew slower than revenue. EBITDA margin expanded 200bps YoY (14%→16%). PAT surged 116% YoY, aided by other income (₹23 Cr vs ₹5 Cr) and lower finance cost as a % of revenue.
Segments
All three segments posted double-digit revenue growth; Aluminium Products (largest segment, 60.8% of revenue) grew 38% YoY with segment result +38.2%; Industrial & Engineering saw profit surge 533% YoY on a 52% revenue increase, turning margin-accretive; Powertrain profit grew 50.7% on 25.4% revenue growth. Group profit is well-diversified across segments.
Key positives
- Revenue growth accelerated to 36.4% YoY (vs 27.3% in Q4FY26)
- OPM expanded 200bps YoY to 16%, second consecutive quarter of expansion after five quarters of contraction
- Employee cost grew only 14.8% YoY vs revenue +36.4%, demonstrating operating leverage
- Industrial & Engineering segment profit jumped 533% YoY on 52% revenue growth
- QIP of ₹2,000 Cr completed; proceeds to reduce debt and fund growth
- Crisil revised outlook to 'Positive' from 'Stable' (June 2026)
Key concerns
- EPS growth (113.3%) lagged PAT growth (116.3%) due to 23% equity dilution from QIP
- Other income of ₹23 Cr inflated PAT; ex-other income, PAT growth would be lower (~80% est.)
- Cost of sales grew faster than revenue (41.8% vs 36.4%) before inventory adjustments
- Powertrain segment revenue growth (25.4%) lagged group average, though profitability improved
Research and educational content only. Not investment advice.