Sharekhan's research report on Carborundum Universal
Fear of sanctions on Russian arm VAW has eased with much clarity leading to no material impact on the company’s fundamentals. VAW’s major business is focussed on Russia and 40% is from exports of which US contributes around 12% of the total revenues which would lead to 2% to overall bottomline estimates. Management has revised downwards the guidance to 5-6% versus 9-11% earlier. Moreover, margins to decline by 100-120 bps from the earlier guidance.
Outlook
We upgrade the stock to Buy with a revised PT of Rs. 1,100 (34x to FY2027EPS of Rs. 36), factoring in a very minimal impact of VAW sanctions. The stock has meaningfully corrected by 34% and provides a value buying opportunity.
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