Sharekhan's research report on Carborundum Universal
CUMI’s annual report is reflective of the company’s vision to pursue broad-based growth in all the three segments through product innovation, capex, and broadening of its market presence. In abrasives, sustained demand from auto, metals, construction, and railways would keep up the growth momentum. Further, Rhodius and Awuko have enhanced the company’s offerings and market reach, which shall aid growth in the long term. Increasing revenue from specialised products in electro-minerals and demand from the U.S., Australia, and Europe would drive overall growth.
Outlook
Improved collection efficiencies have reduced working capital cycle and cash flow from operations have also improved. The stock trades at ~33x its FY25E EPS. We retain our Buy rating with an unchanged PT of Rs. 1,315, building in a ~16%/~30% CAGR over FY2023-FY2025E.
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