Craftsman Automation Ltd (NSE: CRAFTSMAN) Q1 2026 Earnings Call dated Jul. 30, 2025
Corporate Participants:
Unidentified Speaker
Srinivasan Ravi — Chairman & Managing Director
Analysts:
Unidentified Participant
Mumuksh Mandlesha — Analyst
Mukesh Saraf — Analyst
Abhishek Jain — Analyst
Mitul Shah — Analyst
Joseph George — Analyst
Ajox Frederick H — Analyst
Kumar Saurabh — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to earnings Conference call hosted by Craftsman Automation Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Srinivasan Ravi, Chairman and Managing Director of Craftsman Automation Ltd. Thank you. And over to you Mr. Ravi.
Srinivasan Ravi — Chairman & Managing Director
Good afternoon everybody. Thank you for joining this earnings call for the quarter ended 30 June 2025. In the interest of time all the financial numbers have been published and we also have put up a POP presentation explaining some second details a little more. So I will straightaway skip to certain. Data which is not there in the presentation or in the annual report. So I will first talk about consolidated financial ratios. We are at an EBITDA margin of around 15%. And what is very hard thing is so the net debt to EBITDA on a consolidated basis 2.27 on an annualized basis compared to Q1. So we will keep on improving as we move on going forward. In spite of the Capex ROCE pre tax analyst is 14%. Still the plants are not mostly operational, fully operational and this will improve. And again return of capital equity analyzed is around 10%.
This is an indicator of the trend which has happened because after the consolidation all numbers are going for big changes. It is not a Q1Q quarter on quarter comparison. In general in the standalone net debt. To ebitda it’s around 2.87 because we. Have borrowed in Craftsman for the equations and other even for the capex which has been done major. To ebitda it’s around 2.87 because we. Have borrowed in Craftsman for the equations and other even for the capex which has been done major.
So coming to the subsidiaries DRX has. Been accelerating on revenue it has been around 408 crore on the first quarter. Sunbeam top line has been 291 crore and Craftsman GmbH for Germany has been 67 crore on the top line and all except Sunbeam where there has been an ebitda. But I think still it is work in progress as we move forward. In what is milestone there is the Gurgam operations have been ceased, operations have ceased as of end of May and also all labor has been settled paid off on the matter. So the biggest challenge has been overcome. So the work in we are still working on the other plants and the equipment has been shifted.
So this is an update on the Sunbeam. So now I’ll open the floor to Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. You may note that some of the statements which may be made by the management team during this earnings conference call may contain certain forward looking information which are not guarantees of future performance and are subject to a number of risks and uncertainties. We encourage you to refer the disclaimer in the investors presentation of the company.
Further, the management will not be addressing any customer specific queries owning to confidentiality obligations. We kindly request that you avoid mentioning any customer names in your questions. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference. Please limit your questions to two per participant. We will wait for a moment while the question queue assembles. The first question is from the line of Manlesha from Anandrati Institutional Equities. Please go ahead.
Mumuksh Mandlesha
Yeah. Thank you sir for the opportunity. And congrats on the strong results for this quarter. So starting with this on the quota widening plan. Sir, any update on how is the order book shaping there? And how do you see the revenue target of $100 million next four to five years? Do you see intact or do you see the upside to that number?
Srinivasan Ravi
Sir, I’ll answer the second part of the question first. 2030. This 100 million target is in fact that is both for the casting and machining of those particular parts. The castings will be done at Kodavadi. Machining will be done at the RSO plant of Craftsman. So we are ready. And the order intake. I think we are. Our order book is almost crossed. 50% of the 100 million target been projected for the annual basis. Of course this comes into production in various phases. The provost will be happening in FY27 mainly and FY28. And production will start a little in FY27. And peak production I think will be touching in FY29.
This is also in line with the end market requirement of our customers who are mainly scattering these products to the data centers. Data center customers. So currently we are doing some engineering parts. And the cash utilization is hardly 5% or something like that. So we are incurring some minor cash losses. Of course, depreciation loss. So this is why we proved the. Other engineering parts as well as the engine blocks. Some trials already been taken one particular part.
So now the strategy has been in. Cooperation with the customer that some of the parts are already being produced in Kronborg and there is an increased requirement of volume. Kronberg mins cards from GmbH GmbH and. The same customer is asking for increased volume. So we are getting the duplicate tooling from there and the promote will be happening along with our German team and. New customers who are coming in or large customers of Frondberg. They express a lot of confidence in Fronberg after they seeing them general work, some of them. And they have mandated that we do the development complete development Germany before we shift it.
So I think there is some echo. Can we mute the line please? So we expect that there are few. Challenges in this sort of business. But we are fully equipped to meet the challenges because our preparation, our investment and our thorough study from 2020 and careful understanding of the project and customers. And also the question of Froneberg which. Has allowed us to have a first hand view of the technology available. And the Craftsman team and the German team are working together. This is the update.
Mumuksh Mandlesha
Great, sir. Great to see. Strong order book there, sir. So coming to this quarter results we saw good sequential growth in aluminium segment. And despite the low production Q for the PV and the CV segment in this expense. Well in standalone the growth will be largely driven by the alloy ramp up, sir. And also margin improvement there also being seen. Is it because of alloy business getting more profitable, sir.
Srinivasan Ravi
As we speak today, that is Q1 or going forward in Q2 Q3. The alloy bill portion of the business. Is today even very small compared to the entire aluminium business holistically as a standalone itself totally let alone the consolidated portion. So I would rather put up I think less than 15, 20%. 15% on the alloy wheel. Let me get back to that number. So now the other customers, whether it’s. Domestic and export, their ramping up has happened. So in spite of the market being slow, the our orders which we won. A few years back started to ramp up. So we will see the ramp up continue in this coming quarters for standalone. Craftsman aluminium business in spite of little slowness in the domestic industry. So the alloy wheel business is around 13% of our revenue in the stand alone. So on the consolidated basis it doesn’t. Make any significant change.
operator
Sorry to interrupt sir, but I may request you to rejoin the question queue for follow up questions.
Mumuksh Mandlesha
Sure. Yeah, sure.
operator
Thank you. The next question is from the line of Mukesh Sara from Evan De Spark. Please go ahead.
Mukesh Saraf
Yes, sir. Good evening and thank you for the opportunity. First question is on Sunday. Now that you mentioned that the machinery has been moved out of Gurgaon and could you kind of give us some sense on what we can expect in terms of a ramp up there in the next say 2, 3/4. Will we require any more investments now that you know you are now running it for the last two quarters you have probably more insights into how we’re going to see things.
Srinivasan Ravi
You may be aware that what we invested and what labor settlement happened and. What CAPEX that’s been reported in the last year that is already published at its own. So now let us compare to the challenge. There is a modernization requirement because I. Think there’s not the equipments are little. Some also the equipment is obsolete and now the other portion of the capex is the building requirements and other things which may come up because of the shifting. The guru has left it very congested.
The third aspect is some of the process have been manual. We like to semi automate it. In the view of the even today the cost towards manpower is quite high. From the time we negotiated the deal till today it’s around 50%. The manpower cost has been brought down to 50% so there is a long way to go. That withdrawn headcount production has to happen with better processes in the layout, better productivity, better equipment which is more productive. That means over some of the producing. Equipment I think we are using for small volume production then it’s also some. Little of automation is required. So this will have. It’s a trade off between long term. Manufacturing costs versus the CapEx. So we are doing it carefully on this matter.
And anyway in the next year the. Land will be sold if not in this year itself. That’s what we are already started. Not really not put up for sale but I think that will also reduce the debt going forward. So net outflow towards acquiring Sunbeam has. Been Quite reasonable and Q2 will be. Better than Q1 on the revenue side but profitability side because of the huge. Ramp up and the shifting which has. Happened we are not. We are still not certain of the. Margin improvement in Q2 but I think Q4 we can see some reasonable margin improvement going forward for the next year. I think it should be the trough.
Mukesh Saraf
Got it. So. So I mean as of now we are not expecting this modernization capex to be a significant number. We’re working with what we have already planned.
Srinivasan Ravi
Yes, we have planned on not significant number.
Mukesh Saraf
No, no incremental addition to that.
Srinivasan Ravi
Basically yeah. So we are assessing whether the order is going to be there in the future or not. So it will be unless the revenue. Grows in a big way then there’s. No necessity for any huge capacity. It is maybe marginal.
Mukesh Saraf
All right. All right. And my second question is on the alloy wheel facility, could you give some sense? I mean I think we started production last quarter in Diwadi and Hozur will probably come up in the second or third quarter. So number one on Hozur will we see some one off cost initially when the plant starts like we saw it in the third and fourth quarter last year. And number two on Bhiwadi, how is. The ramp up there
Srinivasan Ravi
compared to Q4? I think we have a 20% increase in revenue at Bhiwadi. We just crossed around 50 crore on the revenue on Q1. So we will be quarter on quarter. I think the run rate of some same percentage of increase will happen for. The next few quarters barring Q3. So I think the plant should. Be more mature in the coming say three, four quarters. Now we will not see that sort. Of shakeup which has happened at Biwadi in Uzhur for the simple reason. It was the first alloy wheel plant and we took a short term decision within a month and our preparation time. Was only a few months. We wanted to hit the festive season. We decided in December, started in January. And then we started producing in August.
So in this case the parks are already proved and and some production we are already. We are supplying from north to south a little and we are going to also whatever needs to be proved out will be done before the start of production. So it will be maybe 1/4. There can be a small impact and again the aluminum segment but per se of Craftsman itself has become bigger standalone. So that impact might not be much.
Mukesh Saraf
Got it. Great. Thanks for this. I’ll get back in the queue.
operator
Thank you. The next question is from the line of Abhishek Jain from Alpha Accurate Advisors. Please go ahead.
Abhishek Jain
Thanks for opportunity and strong set of numbers. Then my first question on the powertrain business. So if you standalone basis what kind of the growth are you predicting for the four year basis? Given the liquid growth in the CV construction factor business and in a craftman journey we have seen that revenue run rate is around 70 crores. How do you see ramp up in the coming quarter in the Germany business?
Srinivasan Ravi
I’ll answer the second question first. The Germany business is not a growth business. Marginal adjustment and it’s a small plant and it is quite an old plant. And existing customers and customer base. So we will be expecting the same thing. We have 140 people, 160 people. There with the variable people also. So it’s a hand molded process and these are very low volume, high variety parts. So there is no question about ramp. Up per se in Germany.
So the second point on the powertrain. Is we will see high single digit. Growth and maybe in the Q4 we may on one quarter we may see double digit growth on Craftsman stand alone on the powertrain. This is in spite of commercial vehicle not doing so well. As you may be aware that many multinationals first in the tractor segment and. Then later in the industrial engine segment. And now you can see a lot of news coming today for medium and heavy duty trucks. India is also going to ramp up. In a very big way.
We have the German major announcing that. India will become a hub for medium duty trucks in the future. That means for other markets they are. Going to ship out of Chennai. And we have seen the Indian biggest. Commercial vehicle manufacturer announce trying to tie. Up in having an equation plan in. Europe which I saw in the news today. So this means that as I have been mentioning earlier also that India is the right place to for the powertrain manufacturing for whether it’s a small tractor or medium duty to medium duty.
Our every duty is actually medium duty trucks then light commercial vehicles and also construction equipment of the type which is being used in India which is required in other parts of the market. India is becoming a perfect fit for being manufacturing base for the multinational. So the export of these products will happen through the multinationals. So we will find more investments coming into India from the multinational companies and also Indian companies becoming really large corporate multinational companies.
Indian names also. So this is the growth trajectory for the conventional powertrain of craftsmen which I mentioned a few names about manufacturers and. Engine manufacturers in the past and we are going to expect more and more of this. On top of this we have added. Now the large stationary engines mainly driven by data centers for the EI which. Is a growth story for the next at least seven, eight years. So the powertrain segment is set to grow in total.
Abhishek Jain
My next question on the aluminium side. So we have seen a very strong revenue growth in the doctor in past 2, 3/4. What is the key reason? Is there any price hike and will 400 crores quarterly remit to be continue in the coming quarters?
Srinivasan Ravi
No, I don’t want to comment too much on that because there are only few customers there. Some customers we are already added now. But there’s still not revenues far away. But we’ll be continuing to add more. Customers there for direction also now. But stating that we are first Focused. On our key customers. I think there we are very, very, I think extremely focused on giving them very good quality service and products for their products. For the powertrain there can be a. Little movement up and down on the lie price and the lie price is a pass through. So. So that may be some fluctuation on the top line. And we had a little of exports.
Going back to Korea which is going. To continue for a few more quarters. So there’s no doubt about that or maybe more than a few more years. Let us see how it comes. So the you may be aware even in Korea EV has slowed down a little. So we expect these sort of ice cylinder blocks, cylinder heads, whatever may be. Which is required in the market will continue to be stable or grow. And we also see a new trend coming into the picture on faster vehicles.
It is not the Indian number one. Number two companies which are basically Japanese Koreans. And also we have two large Indian. Players doing very well in the Indian. Market in fashion vehicle, the small passenger vehicle market. I think the other European players and other even Japanese players may make India. As a hub for the small engine manufacturing in the future. For the similar reason of the whatever India requires in Indian market we will be able to able to export also because there is a good even the. Two wheeler we see the same trend.
Abhishek Jain
Thank you.
operator
Thank you. The next question is from the line of Mitul Shah from Dam Capital. Please go ahead.
Mitul Shah
Thank you for the opportunity and congratulations on a very strong operational performance in this challenging environment. So first question on utilization. If you can help with broader numbers on various segment wise utilization.
Srinivasan Ravi
On powertrain on the commercial vehicle portion of it utilization is very low. I think it is around less than 60% depending on the customer, depending on the product, even maybe at 50% level. On the farm sector in the current quarter it has been at a higher level. I would say around 70, 80%. And the SUV segment I think it is around 70, 80% on the construction equipment. On the powertrain it has been quite. Poor because of the emission change which has. There has been some lot of pre buy. So I think. I hope I answered the question on. Powertrains and I’ll move to the aluminium.
Yeah, on the aluminium side we are looking at a diverse customer portfolio in. Craftsmen and the whatever is the growth or degrowth of each of the customers. In the deer vaccine it is already mirrored in. But that has been little offset by you know that May is always a weak month. There is a shutdown of one of the autoplayers for two weeks for their. Annual Maintenance So that is a seasonal effect. But I think we had some exports we have done okay in deer vaccine.
Similarly on craftsman side, the capacity wise, plant wise when we look at it, the variety of parts, what we are getting in and the other direct indirect. Exports have been growing. So capacity utilization is already touching around 75% and going forward it may enter the critical mass of 80 odd percent which is a little risky on a few months on the festive season. So we have good visibility going forward. So we will be adding capacity in. The coming quarters also for in view. Of the next year festive season.
Mitul Shah
Second question on margins. Powertrain margins are at Highest in last four quarters 15.2% despite more or less production quite by few players as well as industry wide slowdown in terms of the PV and CV production. What could be the reason for reasonably good margins on this segment?
Srinivasan Ravi
Earlier post Covid it was that the ramp up was very steep and we. Had no chance to do repair and maintenance for a long time. And we had undertaken a lot of improvement activity, repair and maintenance, modernization, many things in the past and there’s a lot of expenses were booked in the many quarters. I think around five quarters on almost a continuous basis. Now that is behind us number one.
Number two, with that we optimized all over costs. We have not added per se any. Manufacturing plant in the powertrain in the past. We added one more plant last year at adjacent to the current plant for in Faridabad that they had a cost strain for us on this matter. But as things are very stable and no expansion is planned there other than. The large engines, the expense has been controlled.
So this is the real state of affairs. But in the future let us say in one year later, two years later. We again go for an expansion because our order book is very high for some reason. We may see again production margins for two quarters because the expenses will precede. The revenue coming in. That has to be factored in in the in the future. But I think now any revenue increase. Will even further help us for the operating margins.
Mitul Shah
Thanks.
operator
Thank you. Before we take the next question, we would like to remind the participants to press and one to ask a question. The next question is from the line of Joseph George from iifl. Please go ahead.
Joseph George
Thank you. So I have two questions. One is in relation to the aluminium segment margins aluminum segment within the standalone entity. So this quarter we have seen that margins are shot up. So one is what are the drivers? Second is how is the sustainability as you see it. And third is as the alloy wheel business continues to grow and becomes a larger piece of aluminium. Do you think these kind of margins will sustain?
Srinivasan Ravi
I’ll answer the questions in a sequence. And please come up with follow up questions so that clarification is complete. One thing is the traditional alum business of Craftsman has got only two locations fundamentally one is in Coimbatore and one is in Bangalore. And we are operating at optimum capacity already now. So this is giving good operating leverage. That is helping our profitability.
Now the Vivadi plant which was a drag on for almost two three quarters I would say three quarters and now at least it has been EBITDA positive. But not EBIT positive I would say but EBITDA positive. So the drag has stopped and now. That we expect Biwadi aluminium alloy wheel also to concentrate to start giving some margins to the EBIT level. So still the portion of the. Even though alloy wheel has been ramping up the portion of the alloy wheel. Business has been only around 50 crore in the last quarter when compared to the top line revenue on the aluminium business which has been around. 377 crore.
That means it is around less than 15 14% which I mentioned 13 14%. So the plant of Biwadi has been placed in a bigger location where Sandeep Gurugam plant also has been shifted and. The adjacent plot and building has been allocated to Sunbeam. So the our overheads are reasonably well controlled. Because Tapokara plant of Sunbeam is also hardly 10 minutes away from the current Vivadi plant totally. So this sort of better operating leverage. Will lead to the alloy wheel margins. Also being improving steadily as the revenue. Growth in the live will happens. The because the entire overhead of the. Plant is not a standalone alloy wheel plant.
So that is an advantage there because now we have pressure die casting. We are also contemplating in the future. Whether last ni missions of Craftsman hydrogen casting we want to put it up there or not. So as a composite plant we are. Confident about the alloying vessels.
Joseph George
Understood. Sir, just one question rather the second question was on relation to key. So what’s the guidance for CapEx FY26 on a consolidated basis?
Srinivasan Ravi
On a consolidated basis we are looking. At around 800 crore for say around 20% 20% growth rate which we have. Factored in our Capex plans. So the way I look at is that it depends on what happens in the near future. For example we have announced a plant. In Nagpur way back in say 21. And still it’s in the land stage. So there is opportunities which are coming. We are not really concerned about doing little capex. But I would say that we are very careful with the group debt. So now when the land sale happens. At the Gurgaon and then we see. The stability of debt coming down quite dramatically then we may undertake capex if. The opportunity is there. Otherwise we may have to let go the opportunity also. So this will be a function of. Market and our performance.
Joseph George
Understood sir. Thank you. That’s all I had.
Srinivasan Ravi
Thank you.
operator
Thank you. The next question is from the line of Mamukshman Lesha from Anandrati Institutional Equities. Please go ahead.
Mumuksh Mandlesha
Thank you so much for the opportunity. So on the storage side we had targeted a 20% growth for this year and also for the margin over 5% should be achieved, right? Sir.
Srinivasan Ravi
I think we can look at an EBITDA margin of around close to 4% up and down. I’m not sure exactly because it depends. On project to project. There’s not an order book which is there when we can have our margins very stable. But we are gaining traction there and more visibility in the market. And even today if you look at the revenue portion looks big but I think the amount of capital employed is negligible there.
So when you look at the valuation. Portion of it as whole of Craftsman Standalone itself it is very less so. I think we will be giving it little more time to look at the. But it’s scalable business. That is one advantage that without capital. We can scale the business. So we since now we are now five years into this business I would rather give it another six months to one year and then look at it how we will be able to scale it to the next hour.
Mumuksh Mandlesha
And for the top line growth.
Srinivasan Ravi
Top line growth. Just give me a minute please. Around 15%, 15% will be impacted.
Mumuksh Mandlesha
And. On the full year target which we already shared about 70 million revenue and 11 billion and 6 to 6.5 to 7 billion. Do you see any change in the guidance the full year or any upside, sir?
Srinivasan Ravi
No, nothing changes. I have given this number even before. The all the tariff wars started. It was much before that and this. The first time we are given a. Guidance and why you were given the guidance is that there’s a big change in our business model per se. So for everybody to understand where it looked like after one year we had. Given and we are at that run. Rate and there may be some headwinds. In the global markets or anything. We had also a near war situation which was stopped at least. So we stick to the guidance. I don’t see any change to downgrade the guidance that can be an upside depending on how Q4 behaves.
Mumuksh Mandlesha
Got it, sir. And so lastly, can you share what is the absolute mandate number for this end of this condition? Net debt number end of June in that
Srinivasan Ravi
debt number. Okay.
Mumuksh Mandlesha
Yeah.
Srinivasan Ravi
Okay. Net debt consolidated is around 2,400 crores.
Mumuksh Mandlesha
Thank you so much for this.
operator
Thank you. The next question is on the line of Ajax, Frederick H. From Sundaram Virtual Fund. Please go ahead.
Ajox Frederick H
Hi sir. Congrats on a good set of numbers. So my question is on funding. If I’m right, you mentioned the quarterly revenue to be 291 crores, right? For this quarter.
Srinivasan Ravi
Yes.
Ajox Frederick H
And what was this last year and last quarter? Sir.
Srinivasan Ravi
Last quarter. Because the year. The previous year we are not in operation.
Ajox Frederick H
Yeah,
Srinivasan Ravi
yeah. Q4 was around 300 crores.
Ajox Frederick H
Okay, okay. And sir, incrementally, will we be increasing our client base here or what is the visibility we have, particularly on Sunbeam scales? Let’s say one year out.
Srinivasan Ravi
One year is too short a period. For us to look at it because we know that we are. The next six months or nine months will be on consolidation basis. So we might not be very keen to add clients in Sunbeam. Of course there are clients are being added in Craftsman. We have an overlap there on this matter. But we are more on the iter niche. Their internage and our starter nature more or less matching. So we will address it either from Craftsman or from Sanbi as the time comes. Totally
our idea is how to satisfy. Our existing clients on delivery and quantity. Which is most important going forward. And also reduce the operational cost in. The plant and improve operational efficiency. So without that, we don’t want to. Really expand these Sandheem operations until we are very sure about stability in the financial results and also our deliverable to the customer.
Ajox Frederick H
Got it, sir. And secondly, sir, on the land, we were supposed to sell it sometime this year, right now it’s getting shifted to next year or what is happening there?
Srinivasan Ravi
So nothing is happening there. See, we just got the AGM through. And we got approved only last week. So we cannot jump the gun and start trying to do that activity. And you are aware that the process. There is some portion of the land. Which will be acquired by the Ariana government for some expansion which you have received some notices last month. So we are analyzing that. We know that it’s coming. That is around 10% of the land.
So after that, what is the residual land? What’s the value? We are trying to analyze the value. We know that you put on. We have put a number of 350 crores. It was earlier we looked at around 275. Then it was 350 which is another Sunday manual report. Also on this matter we are trying to maximize the value. We’re trying to sell land in a hurry. Also it’s a problem that we might not get the right price. What is on public domain is 350. But our aspirations to go much higher.
Ajox Frederick H
That’s it for me. Congrats on all the best.
Srinivasan Ravi
Thank you.
operator
Thank you. Participants who wish to ask a question may press R&1 at this time. The next question is from the line of Kumar Saurabh from Scientific Investing. Please go ahead.
Kumar Saurabh
Hello.
operator
Yes sir, go ahead.
Kumar Saurabh
Yeah, so earlier we used to work around 20, 21% margin and we have come down to 14 and I sometimes we have told that we may go back to 16, 17%. But what is it which is stopping us from going back to 20? Is it like earlier we used to. Do more machining decreased. The question is what is the gap? Where is the gap between 16, 17 to 20% and is there a way to fill this gap or 17. Or. I mean you will take it as time progresses rather than.
Srinivasan Ravi
Sorry, I will try to answer that in a different way where everybody can understand very easily. Standalone. On the powertrain business today we buy more castings than we used to do in the past. Even then our powertrain business is showing. Much more than the 20% margins. Much higher than the 20%. So aluminium business was non existent around 10 years ago. And it was a small portion of the aluminium business. So that means predominantly powertrain was determining the EBITDA margins. The product mix has changed. Aluminium has become quite big.
Now the revenue on the aluminium is quite big. So that means that the aluminum is a pass through. So our margins do not come from. Top line at all. Our margins come from the derived from the gross profit. So tomorrow aluminum prices increase by 50%. Our margins optically will further come down totally. So please look at our gross margin and then derive the gross from the gross margin derivative margin. I think we have been pretty stable. Over the number of years.
Kumar Saurabh
That’s it. Sir, other question which have been already asked. Wishing all the best sir. You.
Srinivasan Ravi
Thank you.
operator
Thank you. The next question is from the line of Abhishek Jain from Alpha Accurate Advisors. Please go ahead.
Abhishek Jain
Thanks for opportunity. In this quarter we have seen that finance cost has gone down quarter and quarter basis. Why you have mentioned that the net date has increased from 1900 crores to 2400 crores. So just wanted to recap, reconfirm that mean that has 2400 crores or it is lower than that.
Srinivasan Ravi
The three operations happened in the last year the balance 24%.
operator
But your voice dropped. Could you please repeat your answer?
Srinivasan Ravi
Yes. Last year we did three acquisitions. The 24% of Dr. The Sunbeam acquisition and also the Fronwork acquisition. We had two greenfield projects coming up last year. So. And we had CAPEX in almost all the plants. So it is a question of how. Much outflow has gone for acquisitions and how much capex we have incurred. So the debt has been a function of output.
Abhishek Jain
Then at the end of the year FY26, what kind of the date reduction we can expect.
Srinivasan Ravi
See, debt we measure with the 2 level of EBITDA to debt. Net debt to EBITDA I think that. Ratio will keep improving.
Abhishek Jain
Okay, so do you have any target for the date reduction for the next two years?
Srinivasan Ravi
So the aspirations is from our side. We are doing a fine balancing act. Between customer growth expectations. And if you say no to customer, customer will find another supplier who will also take away over a period of time all the new businesses which will. Lead to de growth in customer. Second thing is to maintain all the. I would say the key personnel and things like that. We need to have growth. The third portion is that we have an inflation of 6% in the country. So growing at 6% to 8% means standing at the same still. So we will be on a declining level of margins as and may we do.
Second thing is there is expectation of shareholder that there should be a growth. In profitability going forward. So I think the net debt and everything will be in always. We will be looking at net debt to EBITDA is not the absolute debt. We are looking at it. See, suppose the EBITDA drops to half. Then I think we will stop all capex, all acquisitions, everything like that. At the same time, if the EBITDA grows quite significantly in the coming year, so we may keep the debt level at same level or maybe lesser because we might not do Capex, then the debt will also reduce further.
So I think we have mentioned in our earlier earnings call also at what. Level we will be comfortable. I think. I think 1, 1.5 is very comfortable. I think 2 is not a bad number. All financial institutions for lending instances look at 3.53. So I think we are on a reasonable traction.
Abhishek Jain
And my next question on the revenue grade target for the aluminum segment when all plant to be operation operationally in FY27 with full steam. So just wanted to Understand how would be the revenue growth in FR27? Because all the all plants will be operational and plus that Sunbeam will be stopped with full.
Srinivasan Ravi
We will be grow up and outgrowing the powertrain in the. In the aluminium segment. Aluminum segment will outgrow the powertrain. That is very clear on this matter. Standalone as well as consolidated and aluminum. We have been always saying that the. Growth potential is quite high. And we have shown from the past as the standalone number on the aluminium. What has been the growth for aluminium quarter on quarter 26% has been the growth compared to Q1 of last year to Q2 of this year. That means stand alone. I mean that is without with a small contribution. Even when you remove that 50 odd crore of the alloy wheel business. Even then we look at it, the growth has been around 34% has been. The growth the standalone aluminium apple to Apple. So I think around 15, 20% growth on the standalone aluminum business without alloy wheel. And alloy wheel itself will be another. Growth story which we are looking at. So the growth will continue. Yes,
Abhishek Jain
that means that 20% growth will continue for the next two, three years in the aluminum business.
Srinivasan Ravi
Without alloy mill itself will continue at 20. Alloy wheel adding will lead to some. Surges in some quarters. Then it should stabilize. So overall I think when you look. At a CAGR for four years I. Think 20 to 25% is
Abhishek Jain
okay. And my last question on that tax rate. So what would be the practice tax rate for FY26?
Srinivasan Ravi
Everything will be same as craftsman and doctor is concerned which is applicable for all companies. Sunbeam, we have some tax shield which is there. We have some unobserved depreciation. I think the tax portion will be around 100, 140 crores. Something like this. Yes.
Abhishek Jain
That means that tax rate would go below 20%.
Srinivasan Ravi
No, for Drsin and Craftsman it will be the same as applicable for all companies. For Sanvi Mano we have. Tax shield for some few years which will be around 100 crore. Tax will be available depreciation of around 400 crores.
Abhishek Jain
Okay, thank you.
Srinivasan Ravi
Thank you.
operator
Thank you. The next question is on the line of Mithul Shah from Dam Capital. Please go ahead.
Mitul Shah
Yes sir. Thanks for follow up opportunity. Only one question on global Micros. Based on our discussion with a few key global OEMs. Do you see any near term deferment of the projects or capex for next 2, 3/4? Of course we are betting big on the FY28 onwards for us. But in general just to understand the global environment on the auto OEM Side.
Srinivasan Ravi
See, we have to look at specifically the weather forecast for Craftsman. I would say I think our even. Though we are connected to the global business fraternity, how our customers perform is the key and what is our customer. Strategy and whether they are winning in the marketplace. We have one German truck manufacturer who is also a customer who has announced in the public domain in the global platform itself that India is going to. Be a growth story and a few. Thousands of people are going to be. Hired here and they are going to. Use the medium duty platform across the. Rest of the world. This has been a listed company giving a public statement in the global environment.
o this means that their customer is going to grow. That means there can be an opportunity for us. Similarly, we may have a few customers whether it’s in the two wheeler or. Faster vehicle which are growing. So when they’re growing we need to do that when they are growing in. Despite of the global headwinds. So we follow the current customer base and we follow our instinct on exactly how the market is going to play. We are not taking any long term. Just a strategic bet. Just like investing for the future. Everything is based on hot reality. There can be upside, there can be downside because there can be changes in the market environment. But we don’t follow the customer. I think we’ll default on our supplies.
Mitul Shah
So conclusively we can say our key customers are outperforming or outgrowing the industry situation of slowdown.
Srinivasan Ravi
Not all customers commercial vehicle in general has been down. So it is not that we have done practice. Almost everybody is doing well. Construction commission is not doing well. But I think wherever there is a need on that particular segment, that particular plant, that particular product we need to invest. It is not about Capex available in our Coimtar plant. Cannot be used in our plant in. Jamshedpur, not in Pune. We may then we have to move the missions up and down. Yes, we have done that in the past. But I think this depends on actual demand.
Mitul Shah
Understood sir. As you just highlighted in terms of this sale of land at Gurgaon. But what timeline roughly you as a company internally expect to get it done FY26 itself or it may take a nearly one year type of also time frame to maximize the sale value.
Srinivasan Ravi
See sorry, I’ll decline on this matter if I put a timeline. You know very well how it works in this business. We may lose on the value of the land. So we are not desperate to sell. The land and we know that we can delay it as long as we. Get the right value. It’s not a problem. It’s a question of value. Time value for money. And if you think that by delaying. We will get more than the interest. What we are paying to the bank. I think we will delay it.
Mitul Shah
Thanks. Thanks a lot.
operator
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Srinivasandavi for closing comments.
Srinivasan Ravi
Thank you very much for joining the. Call and staying with us for this time. Thank you.
operator
Thank you. On behalf of Craftsman Automation Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.