Accumulate Carborundum Universal; target of Rs 1178: Prabhudas Lilladher

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Ceramics growth: Ceramics revenue growth guidance raised to 25-28% YoY, driven by strong traction in industrial engineered ceramics, metallized cylinders, and Bloom Energy-related products.
  • Abrasives profitability: Abrasives profitability remains under pressure, but management expects margins to have bottomed out, with gradual recovery towards the normalized 15-16% range.
  • Electrominerals margins: Electrominerals margins are expected to remain relatively stable, supported by favorable product mix and geographic diversification.
  • Rhodius and Awuko: Rhodius is expected to achieve breakeven by Q1FY28, while the closure of Awuko and Foskor Zirconia should eliminate persistent loss-making operations.

Thesis Validation Checklist

  • Ceramics revenue growth: Monitor Ceramics revenue growth and margin expansion to validate the thesis.
  • Abrasives margin recovery: Track Abrasives margin recovery and pricing actions to assess the impact on profitability.
  • Electrominerals performance: Watch Electrominerals' performance and product mix to gauge the stability of margins.
  • Rhodius and Awuko progress: Monitor the progress of Rhodius and the closure of Awuko and Foskor Zirconia to assess the impact on consolidated earnings.