February 09, 2017 / 11:18 IST
Carborundum Universal’s (CUMI’s) 3QFY17 revenues (+6% YoY) were largely in line with our estimates, barring the Electro minerals (EM) segment (-390bps YoY EBIT margins), whose subdued performance impacted overall margins. The EM segment was impacted by (1) an increase in pet coke prices (2) high power costs due to lower captive power generation and (3) RUB appreciation.
OutlookCUMI is slated to begin commercial operations in its relocated facilities in 4QFY17E. The same is expected to aid revenue growth and improve capital efficiency, thereby return ratios. A turnaround in the international abrasives business also augurs well for the company. Despite a soft 3QFY17, we see long-term drivers to be in place for CUMI. Reiterate BUY with a revised TP of Rs 340/share (25x FY19E EPS).
For all recommendations, 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. 
Read More
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
