Sharekhan's research report on Carborundum Universal
Carborundum Universal Limited (CUMI) reported muted numbers for Q4FY22 particularly on the profitability front. EBIT margins across segments plunged y-o-y. The impact of ongoing Russia-Ukraine war on its Russian subsidiary- VAW was not meaningful. On the positive side, due to a ban on exports to Russia by several countries, demand for CUMI’s silicon carbide has increased. Demand is expected to pick up across segments led by a better product mix aided by recent acquisitions. Although maintaining margins remain a challenge, which is likely to be managed through operational efficiencies.
Outlook
We retain a Buy on the stock with an unchanged PT of Rs. 952, considering its healthy earnings growth profile led by strong growth across end user industries.
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