Collins Automation: Benefiting from the construction of global data centers, the engine block specialist has huge potential, first rated Buy (Goldman Sachs)
Goldman Sachs initiated coverage on India's Craftsman Automation (CRAF.BO) with a positive rating.
Goldman Sachs initiated coverage on India's Craftsman Automation (CRAF.BO) with a positive rating. The report pointed out that the company is the world's leading engine block expert, and its core growth engine comes from the explosion of demand for diesel generator sets in global data center construction. Key data shows that the company's FY26 revenue is 80.69 billion rupees, a year-on-year increase of 42%, and the compound growth rate of FY27-29E revenue is expected to exceed 17%. The logic behind it is that AI and cloud computing have driven a surge in data center capital expenditures, driving demand for high-power diesel generators for backup power, and Collins is a core supplier of this key component of engine blocks. The market may not yet fully realize the driving effect of data center construction on the company's business, treating it as a traditional auto parts company. One sentence conclusion: Collins Automation is the "hidden champion" of data center construction. Its engine block business is benefiting from the super cycle of global computing power expansion and showing strong growth momentum. Positive/negative: Positive for Collins Automation (CRAF.BO) and related precision manufacturing companies in India. The market's perception of the company may still remain in the traditional auto parts field, and the growth potential of its data center-related business has not yet been fully priced. Catalysts: 1) Data center order volume and revenue contribution in the company's subsequent quarterly financial report; 2) Capital expenditure guidance from the world's major cloud service providers (CSP); 3) Demand data in the global data center backup power market.