1
Please refer to important disclosures at the end of this report
1
1
Carborundum Universal Limited (CU) develops services and solutions for
abrasives, electrominerals or ceramics. Consolidated sales improved to 11% YoY
led by 11% and 19% growth in abrasives and ceramics, respectively.
Management has guided for 15% revenue growth in FY18. The overall capex
stood at `30 crores and management expects to incur `100cr in FY18. It expects
to touch `3000cr-`3500cr in sales in the next 2-3 years and also expects the
GST impact in Q1 FY18 will soften in the rest of FY18.Electrominerals segment
picked up slightlyup 6.6% YoY. In electrominerals, relocated entities and
products would lead to a further `70cr-`80cr in sales in FY18 which would add
to growth. Consolidated abrasives revenue grew 10.7% YoY (10.0% in FY17),
continuing its steady performance as India and overseas operations clocked
decent growth. Industrial ceramics is growing more than 20% and has a healthy
order book. Strong cash flow (~`200cr+ since last 6 years) generation has led
to increase in capex and debt repayment. The standalone company has become
debt free, while at the consolidated level, debt equity stands at merely 0.1.
Further, sales at relocated entities and demand growth in abrasives and ceramics
would lead to strong FY18 sales growth. CU has reported RoE 11.87% and is
trading at a valuation P/E of 38.68x of FY17 TTM earnings. Hence BUY.
BUY
CMP `337
1.0
Reuters Code
CRBR.NS
CU:IN
1
BSE Sensex
31,196
Nifty
9,722
Face Value (`)
Other Industrial Products
Market Cap (` cr)
6,350
52 Week High / Low
364.8/228
Avg. Daily Volume
54,110
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Carborundum Universal Ltd
Others | Other Industrial Products
Aug 21, 2017
2
Carborundum Universal Ltd |other Industrial Products
June 5, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Carborundum Universal
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)