Carborundum Universal Ltd. share price target

Volume Led Growth Across Segments: Revenue grew by ~ 12% to Rs. 6.6 bn and EPS grew by ~ 17% on YoY basis during Q2FY19 which is lower than consensus estimate by ~ 5% for the quarter. Last year H1 business witnessed a significant disruption, Q1 had GST impact and growth started to pickup in Q2, revenue for H1FY19 grew by 17% and EPS grew by 34% on YoY basis.

Volume Led Growth for CUMI in Q1: Carborundum Universal (CUMI) Q1 revenue grew by 22% to Rs. 6.3 bn on account of growth in volumes across segments and net income grew by 56% to Rs. 0.65 bn on relatively better material margins.

Carborundum Universal (CUMI) posted double digit revenue growth (16%) inQ4FY18. Ceramics segment (12.7%) growth was led by industrial ceramics and Electrominerals segment growth (18.7%) led by volumes from India and Russian operations.

Carborundum's (CUMI) operational performance in Q3FY18 was broad-based. In an inflationary situation, CUMI did well to improve margin (up 120 bps at ~17%) as it was able to get price hikes. Management expects the trend to continue over the next few quarters.

The Abrasives segment consists of bonded, coated, processed cloth, polymers, power tools and coolants. The operations are carried out through over 10 manufacturing facilities located pan India, Russia and other countries. The Ceramics segment consists of super refractories, industrial ceramics, anticorrosives and bio ceramics. Its user industries include power generation and transmission, coal washers, grain handling, ballistic protection and construction. The Electro minerals segment includes abrasive/refractory grains, micro grits for the photovoltaic industry and captive power generation from hydel power plant. Its product range includes white and brown fused alumina, silicon carbide, fused...

CUMI Q3FY18 result was in line with our estimate. Volumes across divisions have started to pick up with exception to channel abrasives, severed by GST rollout. Industrial ceramics and EMD division have been witnessing rising demand across...

Carborundum's (CUMI) strong operational performance in Q2FY18 was driven by (1) bounce-back in domestic abrasive business on partial channel restocking after GST implementation; (2) higher volume at VAW (Russian subsidiary)

CUMI Q2FY18 PAT outperformed our estimate on back of higher margin in the Electrominerals division (EMD). Revenues at Rs 5.8 Bn came in line with our estimate. Management highlighted that the abrasives business has started to make up for the lost volumes in the previous quarter due to GST transition and would further report traction in 2HFY18. Industrial ceramics and EMD division have been witnessing rising demand across geographies. Company's Russian subsidiaries VAW reported significant volume led growth in the quarter. We however believe that the company would take slightly longer to recover from...

Higher Volumes Drive Revenue Growth During H1FY18: Higher volumes from across geographies paved for consolidated revenue (net) growth of 7.9% on YoY basis to Rs.10,917mn and the growth at standalone levelreached 3.5% to Rs.7,067mn during H1FY18.

Despite near-term disruption in business on GST implementation, Carborundum's (CUMI) consolidated Q1FY18 PAT was flat YoY at Rs 418 mn. Transitioning to GST impacted the domestic revenue, as the company refrained from extending discount to distributors.