⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
CRAFTSMAN - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.9
| Stock Code | CRAFTSMAN | Market Cap | 17,658 Cr. | Current Price | 7,398 ₹ | High / Low | 8,069 ₹ |
| Stock P/E | 102 | Book Value | 1,206 ₹ | Dividend Yield | 0.07 % | ROCE | 8.11 % |
| ROE | 4.31 % | Face Value | 5.00 ₹ | DMA 50 | 7,320 ₹ | DMA 200 | 6,547 ₹ |
| Chg in FII Hold | 0.58 % | Chg in DII Hold | 0.88 % | PAT Qtr | 58.4 Cr. | PAT Prev Qtr | 47.2 Cr. |
| RSI | 48.7 | MACD | 22.3 | Volume | 19,541 | Avg Vol 1Wk | 81,309 |
| Low price | 3,700 ₹ | High price | 8,069 ₹ | PEG Ratio | -6.28 | Debt to equity | 0.96 |
| 52w Index | 84.6 % | Qtr Profit Var | 1,005 % | EPS | 71.6 ₹ | Industry PE | 28.0 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT rose from 47.2 Cr. to 58.4 Cr. (strong sequential growth), but overall margins remain thin.
- Profit Margins: ROE at 4.31% and ROCE at 8.11% are weak, indicating inefficient capital utilization.
- Debt Ratios: Debt-to-equity at 0.96 shows high leverage, raising financial risk.
- Cash Flows: Dividend yield at 0.07% is negligible, suggesting limited shareholder returns.
💹 Valuation Indicators
- P/E Ratio: 102 vs Industry PE of 28.0, showing extreme overvaluation.
- P/B Ratio: Current Price 7,398 ₹ / Book Value 1,206 ₹ ≈ 6.13, premium valuation.
- PEG Ratio: -6.28, indicating unsustainable or distorted growth expectations.
- Intrinsic Value: Estimated fair value around 4,500–4,800 ₹, making current price significantly overvalued.
🏢 Business Model & Competitive Advantage
- Craftsman Automation operates in automotive components, engineering, and precision manufacturing.
- Competitive advantage lies in diversified product offerings and long-term OEM relationships.
- However, high debt and weak return ratios limit its financial flexibility compared to peers.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive only if price corrects to 4,500–4,800 ₹, closer to intrinsic value.
- Long-Term Holding: Risky at current valuations due to high debt and weak ROE/ROCE; suitable only for aggressive investors willing to tolerate volatility.
✅ Positive
- Sequential PAT growth (47.2 Cr. → 58.4 Cr.).
- Strong industry presence in automotive and precision engineering.
- FII (+0.58%) and DII (+0.88%) holdings show institutional interest.
⚠️ Limitation
- Extremely high P/E ratio (102) compared to industry average (28).
- Weak ROE (4.31%) and ROCE (8.11%) highlight poor efficiency.
- High debt-to-equity (0.96) increases financial risk.
📉 Company Negative News
- High leverage raises concerns about debt servicing capacity.
- Valuation multiples far exceed industry norms, making the stock vulnerable to correction.
📈 Company Positive News
- Quarterly PAT growth of over 20% sequentially.
- Institutional investors (FII & DII) increased holdings, signaling confidence.
🏭 Industry
- Automotive and engineering industry PE at 28.0, much lower than Craftsman’s 102, suggesting relative overvaluation.
- Industry growth supported by rising demand for auto components and manufacturing exports.
🔎 Conclusion
- Craftsman Automation shows strong sequential profit growth but suffers from weak efficiency metrics and high debt.
- Valuation is extremely stretched, making current levels risky for fresh entry.
- Best suited for long-term investors only if price corrects to 4,500–4,800 ₹; cautious accumulation advised.
Would you like me to also outline debt reduction scenarios and how they could improve Craftsman’s ROE/ROCE over the next few years?