Reduce Carborundum Universal: target of Rs 1450: ICICI Securities

Reduce

ICICI Securities's research report on Carborundum Universal

Carborundum Universal (CUMI) has reported revenue degrowth of 0.5% YoY at INR 12bn, EBITDA margin of 16.2% and profit of INR 1.1bn, down 0.2% YoY in Q1FY25. It continues to report muted set of results since last four quarters on account of a) competition with Chinese abrasives, b) loss of one customer in engineered ceramics and c) 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.

Outlook

We like everything about CUMI’s business but we are not willing to buy it at CMP. Therefore, we revise our rating to REDUCE while maintaining a TP of INR 1,450.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Carborundum Universal_07082024_ICICI Securities