CRAFTSMAN - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.0

🏭 Fundamental Analysis: Craftsman Automation Ltd. (CRAFTSMAN)

Craftsman Automation is a precision engineering and manufacturing company serving automotive and industrial segments. While recent profit growth is strong, the valuation is stretched and capital efficiency is modest, making it a cautious pick for long-term investors.

Metric Value Implication

Market Cap ₹15,417 Cr Mid-cap; niche industrial player

Stock P/E 66.8 Extremely expensive vs. industry PE of 31.2

PEG Ratio 7.10 Severely overvalued relative to growth

ROCE / ROE 11.7% / 9.41% Below average; weak capital efficiency

Dividend Yield 0.08% Negligible; not suitable for income investors

Debt-to-Equity 0.83 Moderately high; leverage risk

EPS ₹88.4 Solid earnings base

Qtr Profit Var +42.1% Strong recent growth; momentum is visible

FII/DII Holding Change +0.19% / -0.05% Neutral institutional sentiment

📉 Technical Analysis

Current Price: ₹6,448

DMA 50 / DMA 200: ₹5,773 / ₹5,236 → Trading well above both; bullish trend

RSI: 67.0 → Approaching overbought zone

MACD: +224 → Strong bullish momentum

Volume: Significantly above average; high investor interest

💰 Ideal Entry Price Zone

₹5,600–₹5,800

This range offers a better margin of safety and aligns with DMA support

Avoid fresh entry above ₹6,500 unless PEG ratio compresses and ROCE improves

📈 Long-Term Investment Outlook

Strengths

Strong quarterly profit growth — momentum is real

High EPS — earnings base is solid

Bullish technicals — short-term upside potential

Risks

PEG > 7 — severely overvalued for current growth trajectory

ROCE and ROE below ideal levels — weak long-term compounding potential

High P/E — priced for perfection

Low dividend yield and moderate debt — not ideal for conservative investors

Craftsman Automation is a momentum-driven industrial stock, but long-term investment appeal is limited unless capital efficiency improves and valuation cools.

🏁 Exit Strategy / Holding Period

If you already hold CRAFTSMAN

Holding Period: 1–2 years to ride current growth momentum

Exit Strategy

Consider partial profit booking near ₹7,000–₹7,100 (recent high)

Reassess if ROCE stays below 12% and PEG remains above 4

Hold only if quarterly growth sustains and debt levels reduce

Would you like a comparison with other industrial automation players like Bharat Forge or Schaeffler India to explore better long-term options?

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