Carborundum Universal Q1 Results Review - Lack Of Incremental Triggers, Downgrade To Reduce: ICICI Securities

ICICI Securities Report

Carborundum Universal Ltd.'s has reported revenue degrowth of 0.5% YoY at Rs 12 billion, Ebitda margin of 16.2% and profit of Rs 1.1 billion, down 0.2% YoY in Q1 FY25. It continues to report muted set of results since last four quarters on account of-

1. competition with Chinese abrasives,

2. loss of one customer in engineered ceramics and

3. decline in rouble value negating the gains of growth in subsidiaries’ revenues.

However, both the impacts are already factored in base quarters, and thus, we expect growth to return in balance nine months of FY25. We also expect Chinese competition to decline this year. We like everything about Carborundum's business but we are not willing to buy it at current market price. Therefore, we revise our rating to Reduce while maintaining a target price of Rs 1,450.

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