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Last Updated : Feb 09, 2017 11:18 AM IST | Source: Moneycontrol.com

Buy Carborundum Universal; target of Rs 340: HDFC Securities

HDFC Securities is bullish on Carborundum Universal has recommended buy rating on the stock with a target price of Rs 340 in its research report dated February 07, 2017.

 
 
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HDFC Securities' research report on Carborundum Universal


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.


Outlook
CUMI 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).

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First Published on Feb 9, 2017 11:18 am
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