CARBORUNIV - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.7

🔍 Financial Strength & Profitability

Revenue & Profit Growth: Quarterly PAT jumped 55.4%—a strong signal of earnings momentum.

ROCE (17.6%) & ROE (13.3%): Healthy returns, though not exceptional for a high-P/E stock.

Debt-Free: Debt-to-equity of 0.00 is a major plus, indicating financial discipline and low risk.

EPS of ₹19.6: Solid earnings base, but valuation may be pricing in aggressive future growth.

📈 Valuation Metrics

Metric Value Insight

P/E Ratio 50.5 Expensive; matches industry average

P/B Ratio ~7.4 High premium over book value

PEG Ratio 6.13 Overvalued relative to growth

Intrinsic Value — Likely below current price

The PEG ratio above 6 suggests the stock is richly valued even after factoring in growth.

🏭 Business Model & Competitive Edge

Carborundum Universal is a Murugappa Group company with operations in abrasives, ceramics, and electrominerals. Its strengths include

Diversified industrial exposure

Technical expertise and long-standing brand

Zero debt and consistent profitability

Its moat lies in specialized manufacturing and long-term industrial relationships.

📊 Technical Indicators & Sentiment

RSI: 59.9 – Neutral, not overbought.

MACD: 19.3 – Bullish momentum.

Volume Spike – Indicates rising interest.

DMA 50: ₹950 vs. Current Price ₹987 – Slightly above short-term average, but below DMA 200.

💡 Investment Strategy

🔽 Entry Zone

Ideal Buy Range: ₹850–₹900, closer to 52-week low and below DMA 50.

Current Price ₹987: Slightly expensive based on valuation metrics.

🕰️ Long-Term Holding

Hold if already invested: Strong fundamentals and zero debt make it a safe long-term bet.

Avoid fresh entry at current levels: Wait for a correction or consolidation.

Let me know if you'd like a peer comparison or a discounted cash flow estimate to refine the valuation further.

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