Reduce Carborundum Universal: target of Rs 895: ICICI Securities

ICICI Securities recommended reduce rating on Carborundum Universal with a target price of Rs 895 in its research report dated May 14, 2025.

Broker Research

May 23, 2025 / 12:14 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Securities's research report on Carborundum Universal

Carborundum Universal (CUMI) reported an underwhelming set of result. Consolidated revenues were flat YoY at INR 12bn, EBITDA declined by 30% YoY to INR 1.5bn and profit was at INR 301m in Q4FY25. Note that profit for FY25 declined to INR 4bn (-15% YoY). The underlying performance across business was weak as 1) abrasives grew in single digits, 2) ceramics grew in single digits, and 3) electro-minerals was impacted by sanctions on Russian subsidiary (VAW) and rising cost of raw materials.

Outlook

The guidance for FY26 is muted on the back of continued weakness in underlying businesses. In this backdrop, CUMI unveiled a five-year strategy to improve the product basket and grow its market share and revenues by 2x while improving sustainable profits. Notwithstanding the near-term weakness, we believe the new strategy is likely improve the product basket to start yielding positive results from FY27. Maintain REDUCE with TP of INR 895/share (vs INR 1,275 earlier).

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