Up to 20% upside potential! Here's why Motilal Oswal is bullish on Craftsman Automation stock
Brokerage firm Motilal Oswal has reiterated its 'BUY' rating on the stock with a target price of Rs 5,305 (valued at 23x FY26E EPS).
- May 1, 2024,
- Updated May 1, 2024 2:49 PM IST
Shares of Craftsman Automation are in focus after a weak Q4 show. The company's net profit fell 12 per cent year-on-year to Rs 70.5 crore in the fourth quarter. However, revenue of the company rose 12.7 per cent to Rs 1,105 crore, as against Rs 980 crore in Q4 FY23.
However, brokerage firm Motilal Oswal has reiterated its 'BUY' rating on the stock with a target price of Rs 5,305 (valued at 23x FY26E EPS). "To factor in the weakness in CVs and tractors, we reduce our FY25E/26E EPS by 6%/5%," it said.
According to Motilal Oswal, CRAFTSMAN’s track record of creating and gaining
market leadership organically is uncommon in the auto component industry. This has enabled it to deliver a good balance of strong growth and superior capital efficiency.
The brokerage firm said that the company has leveraged its engineering DNA to evolve into the largest independent machining player, among the top three players in Storage Solutions, and a credible competitor in the Aluminum Die-casting business (within six years of starting the business).
"With the government’s increasing focus on import substitution and emerging opportunities from global supply chain realignments, the company will be one of the key beneficiaries of these opportunities due to its strong capabilities in product design, process, and captive sourcing of fixtures and machines," it added.
Motilal Oswal noted that Craftsman has a well-diversified business model with a balanced exposure between Auto and non-auto domains. Revenue is now well balanced, as there is not a single end-user industry constituting over 30% of revenue, it said.
About Craftsman Automation
The company manufactures several components and sub-assemblies for diverse industrial applications like automotive, industrial, engineering segments, pharma, e-commerce, etc.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Shares of Craftsman Automation are in focus after a weak Q4 show. The company's net profit fell 12 per cent year-on-year to Rs 70.5 crore in the fourth quarter. However, revenue of the company rose 12.7 per cent to Rs 1,105 crore, as against Rs 980 crore in Q4 FY23.
However, brokerage firm Motilal Oswal has reiterated its 'BUY' rating on the stock with a target price of Rs 5,305 (valued at 23x FY26E EPS). "To factor in the weakness in CVs and tractors, we reduce our FY25E/26E EPS by 6%/5%," it said.
According to Motilal Oswal, CRAFTSMAN’s track record of creating and gaining
market leadership organically is uncommon in the auto component industry. This has enabled it to deliver a good balance of strong growth and superior capital efficiency.
The brokerage firm said that the company has leveraged its engineering DNA to evolve into the largest independent machining player, among the top three players in Storage Solutions, and a credible competitor in the Aluminum Die-casting business (within six years of starting the business).
"With the government’s increasing focus on import substitution and emerging opportunities from global supply chain realignments, the company will be one of the key beneficiaries of these opportunities due to its strong capabilities in product design, process, and captive sourcing of fixtures and machines," it added.
Motilal Oswal noted that Craftsman has a well-diversified business model with a balanced exposure between Auto and non-auto domains. Revenue is now well balanced, as there is not a single end-user industry constituting over 30% of revenue, it said.
About Craftsman Automation
The company manufactures several components and sub-assemblies for diverse industrial applications like automotive, industrial, engineering segments, pharma, e-commerce, etc.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.