Stock Snapshot
Price Performance
Recommendation Rationale
Favorable growth outlook supported by strategic divestitures and innovation initiatives.
Basis of our Recommendation
Carborundum Universal is poised for growth driven by strategic divestitures and a focus on high-value segments, supported by significant CAPEX investments. The company aims to enhance profitability through innovation and digital transformation, despite facing competitive pressures and execution risks in scaling new technologies. Overall, the outlook remains positive with expected sales growth in FY27.
Why We Like This Stock
- Strategic divestitures expected to improve profitability and margins
- Significant CAPEX targeting high-growth, value-added segments
- Strong demand visibility in the SOFC segment and advanced electronic components
Things To Watch Out For
- Intense competition from low-priced Chinese products
- Execution risk associated with scaling complex new technologies
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 4,702 | 4,894 | 5,206 | 5,333 | 5,572 |
| Profit Before Tax (Cr.) | 652 | 577 | 417 | 457 | 484 |
| PBT Margin | 13.9% | 11.8% | 8.0% | 8.6% | 8.7% |
| Net Profit (Cr.) | 455 | 370 | 190 | 294 | 311 |
| EPS | 23.1 | 19.0 | 11.3 | 15.4 | 16.3 |
Company Overview
Show Company Profile
Carborundum Universal Limited, together with its subsidiaries, manufactures and sells abrasives, ceramics, and electrominerals in India and internationally. It operates through three segments: Surface Engineering, Technical Ceramics and Super Refractory Solutions, and Electrominerals. The company offers super, bonded and coated abrasives, cutting and grinding, metal working fluids, and power tools; and electro minerals, such as alumina, carbides, zirconia, and grit powders. It also provides industrial ceramics for applications in mining and mineral processing, power and energy systems, mobility, semiconductors and electronics, and aerospace and defence; and manufactures super refractories, including dense bonded, insulating bonded, monolithics, pre-cast prefired components, acid-resistant liners comprising carbon bricks, advanced composites, specialty screeding and coatings, polymer concrete cells, and structural composites, including piping for abrasion resistance; and graphene, phase change materials, high-purity silicon carbide, and specialty polymers. In addition, the company offers IT infrastructure facility management, software application development, remote infrastructure management, and IT security management services; and operates gas-based power generation facility. Carborundum Universal Limited was incorporated in 1954 and is based in Chennai, India.