Hold Grindwell Norton; target of Rs 1744: Prabhudas Lilladher

Prabhudas Lilladher's research report on Grindwell Norton

Grindwell Norton (GWN) delivered a decent quarter performance during the quarter, with revenue rising ~12% YoY to Rs7.7bn with EBITDA margin contracting by 47bps YoY to 18.2% owing to softer gross margins. Ceramics and Plastics segment remained a key growth driver delivering a healthy growth of 14.8% YoY alongside margin improvement. Abrasives division grew modestly by 4.1% YoY with flattish margins reflecting the lingering impact of Chinese dumping & slower exports. While Digital Services’ business recorded topline growth but continued to face margin compression. With the recent land acquisition at Halol, Gujarat in Q1FY26, GWN is strategically positioned for future capacity expansion and manufacturing footprint providing long-term growth visibility.

Outlook

The stock is trading at a P/E of 44.8x/38.6x on FY26/27E earnings. We roll forward to Sep’27E and maintain ‘HOLD’ rating with a TP of Rs 1,744 (Rs 1,739 earlier) valuing the stock at a PE of 38x Sep’27E (40x Mar’27E earlier).