PL First Cut – Carborundum Universal ltd. Q2FY24

PL First Cut – Carborundum Universal ltd. Q2FY24 – Amit Anwani – Research Analyst, Prabhudas Lilladher Pvt Ltd

Carborundum Universal ltd. Q2FY24- First Cut- Results below estimates, Electrominerals segment dragged performance.

Result Summary

Consolidated

✳️Revenue came in at Rs11.5bn, up 1.6% YoY (vs PLe ~Rs12.8bn and consensus estimates of Rs12.7bn), driven by growth in Ceramics segment (up 4.2% YoY to Rs2.7bn) and Abrasives segment grew 5.5% YoY to Rs5.1bn. While Electrominerals segment declined 7.8% YoY to Rs3.8bn

✳️EBITDA grew 2.8% YoY to Rs1.7bn (PLe ~Rs1.9bn and consensus estimate of Rs1.8bn), with EBITDA margin remain broadly flat at 14.6% (PL estimate of 14.8%).

✳️Segment-wise EBIT margin- Abrasives margins expanded to 7.3% vs 5.8% in Q2FY23, Ceramics margins expanded to 27.8% vs 25.4% in Q2FY23 and Electrominerals margins contracted to 16.3% vs 16.9% in Q2FY23.

✳️PAT grew ~14.5% YoY to Rs1bn (vs PLe and consensus estimate of Rs1.2bn) aided by higher other income (up 144.3% to Rs196mn).

Standalone

✳️Revenue grew 5.8% YoY to Rs6.5bn (PLe Rs7.4bn), driven by growth in Ceramics segment (up 3.1% YoY to Rs2.2bn), Abrasives up 3.4% YoY to Rs2.9bn and Electrominerals up 125 YoY to Rs1.9bn.

✳️EBITDA grew 18.7% YoY to Rs1.2bn (PLe Rs1.4bn), with EBITDA margins expanding 40bps YoY to 18.4%.

✳️Segment wise EBIT margin- Abrasives margins expanded to 16.7% vs 12.5% in Q2FY23, Ceramics margins expanded to 26.2% vs 25.5% in Q2FY23, while it contracted for Electrominerals to 11.9% vs 15.8% in Q2FY23.

✳️PAT grew 15.4% YoY to Rs828mn (PLe Rs947mn), aided by higher other income (up 53.8% YoY to Rs83mn).

✳️The stock is currently trading at PE of 43.3x/33x/26.8x FY24/25/26E. We have Buy rating on stock with TP of Rs1482,