Buy Carborundum Universal; target of Rs 427: Edelweiss

Edelweiss is bullish on Carborundum Universal has recommended buy rating on the stock with a target price of Rs 427 in its research report dated May 07, 2018.

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May 18, 2018 / 16:23 IST

26 Aug, 2025 12:21

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Edelweiss' research report on Carborundum Universal

Carborundum Universal’s (CUMI) Q4FY18 consolidated sales grew 16% YoY, led by strong double-digit sales growth across its three segments - abrasives’ posted 12% YoY growth, electrominerals 23% and ceramics 18%. Management has guided for 16% sales CAGR over FY18-20 with sales of ~INR27bn by FY19 and ~INR32bn by FY20, with higher margins led by price hikes. On strong R&D and scaling up the value chain with advanced products, we believe CUMI is well positioned to leverage industrial growth across segments, both in India and globally. We estimate PAT CAGR of 25% over FY18-20. Maintain “BUY” with TP of 427 (24x FY20E EPS).

Outlook

We believe CUMI is well positioned to ride demand recovery across segments in India and globally, by scaling up the value chain with advanced products. Maintain ’BUY’ with TP of 427 (in line with five-year avg. P/E and 20% discount to Grindwell Norton).

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