Kotak Institutional Equities retains add on Carborundum Universal, revises fair value to Rs 325

Kotak Institutional Equities has retained add rating on Carborundum Universal in the long term and revised fair value to Rs 325 from Rs 335. The stock ended up 2% at Rs 308.30 on Wednesday while the BSE Sensex closed 220.03 points up at 40,051.87.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 677.55 crore, up 2.11% from last quarter sales of Rs 663.58 crore and up 4.10% from last year same quarter sales of Rs 650.88 crore. The company has reported net profit after tax of Rs 63.51 crore in the latest quarter.


Investment Rationale

Carborundum Universal continues to focus on internals (cost and capex controls, expanding distribution network, and developing new markets) as demand slowdown continues to take toll, said Kotak Institutional. Such slowdown and other market changes (compliant Chinese capacities, US-China trade war) should yield a stronger Carborundum Universal over time, said Kotak Institutional.