Carborundum Q4 Review: ICICI Securities Maintains 'Reduce', Cuts Target Price Post Underwhelming Result

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ICICI Securities Report

Carborundum Universal Ltd. reported an underwhelming set of result. Consolidated revenues were flat YoY at Rs 12 billion, Ebitda declined by 30% YoY to Rs 1.5 billion and profit was at Rs 301 million in Q4 FY25. Note that profit for FY25 declined to Rs 4 billion (-15% YoY).

The underlying performance across business was weak as-

1. abrasives grew in single digits,

2. ceramics grew in single digits, and

3. electro-minerals was impacted by sanctions on Russian subsidiary (VAW) and rising cost of raw materials.

The guidance for FY26 is muted on the back of continued weakness in underlying businesses. In this backdrop, Carborundum unveiled a five-year strategy to improve the product basket and grow its market share and revenues by two times while improving sustainable profits.

Notwithstanding the near-term weakness, we believe the new strategy is likely improve the product basket to start yielding positive results from FY27. Maintain Reduce with target price of Rs 895/share (vs Rs 1,275 earlier).

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