CARBORUNIV - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | CARBORUNIV | Market Cap | 14,935 Cr. | Current Price | 782 ₹ | High / Low | 1,217 ₹ |
| Stock P/E | 42.0 | Book Value | 143 ₹ | Dividend Yield | 0.51 % | ROCE | 17.6 % |
| ROE | 13.3 % | Face Value | 1.00 ₹ | DMA 50 | 839 ₹ | DMA 200 | 937 ₹ |
| Chg in FII Hold | 0.11 % | Chg in DII Hold | 0.19 % | PAT Qtr | 84.5 Cr. | PAT Prev Qtr | 64.3 Cr. |
| RSI | 37.2 | MACD | -13.1 | Volume | 52,861 | Avg Vol 1Wk | 3,18,514 |
| Low price | 771 ₹ | High price | 1,217 ₹ | PEG Ratio | 5.11 | Debt to equity | 0.00 |
| 52w Index | 2.66 % | Qtr Profit Var | 4.93 % | EPS | 18.6 ₹ | Industry PE | 47.4 |
📊 Financials: Carborundum Universal Ltd. (CARBORUNIV) has delivered steady profitability with PAT rising to 84.5 Cr from 64.3 Cr. ROE at 13.3% and ROCE at 17.6% indicate moderate efficiency. Debt-to-equity ratio of 0.00 reflects a debt-free balance sheet, strengthening financial stability. EPS of 18.6 ₹ supports earnings visibility, though growth momentum remains modest with quarterly profit variation of 4.93%.
💹 Valuation: Current P/E of 42.0 is slightly below the industry average (47.4), but still expensive relative to earnings. P/B ratio ~5.47 (Price 782 ₹ / Book Value 143 ₹) is high, suggesting premium valuation. PEG ratio of 5.11 indicates stretched valuation compared to growth. Dividend yield of 0.51% provides limited income support.
🏢 Business Model: Carborundum Universal operates in abrasives, ceramics, and electro-minerals, serving industrial and manufacturing sectors. Its competitive advantage lies in diversified product portfolio, global presence, and debt-free operations. Strong institutional support with slight increases in FII (+0.11%) and DII (+0.19%) holdings adds confidence.
📈 Entry Zone: Attractive accumulation zone between 760–780 ₹, near support levels and below DMA200 (937 ₹). RSI at 37.2 indicates oversold conditions, while MACD (-13.1) suggests bearish momentum. Long-term investors should wait for valuation comfort before accumulating.
🔒 Holding Guidance: Fundamentally stable with debt-free operations and diversified business model. However, valuations are stretched, making cautious accumulation advisable. Suitable for long-term holding if entered near lower support levels.
Positive
- Debt-free balance sheet enhances financial stability.
- Moderate ROE (13.3%) and ROCE (17.6%) show operational efficiency.
- Diversified product portfolio across abrasives, ceramics, and electro-minerals.
- Institutional confidence with slight FII and DII increases.
Limitation
- High P/E (42.0) and P/B (5.47) indicate expensive valuation.
- PEG ratio of 5.11 highlights stretched valuation relative to growth.
- Dividend yield of 0.51% offers limited income support.
- Quarterly profit growth (4.93%) is modest compared to peers.
Company Negative News
- No major negative news reported, but valuations remain elevated and growth momentum is modest.
Company Positive News
- Debt-free operations strengthen balance sheet resilience.
- Steady profit growth with PAT improvement.
- Institutional holdings show incremental confidence.
Industry
- Industrial manufacturing sector benefits from infrastructure and economic growth.
- Industry P/E at 47.4 suggests optimism in the sector.
- Global demand for abrasives and ceramics supports long-term growth potential.
Conclusion
✅ Carborundum Universal Ltd. is financially stable, debt-free, and diversified across industrial segments. However, valuations are stretched with limited dividend support. Long-term investors should consider accumulation near 760–780 ₹ for better margin of safety, while monitoring growth momentum and sector demand.
I can also prepare a peer comparison with other industrial ceramics and abrasives companies to show how CARBORUNIV stacks up in valuation and efficiency. Would you like me to add that?