Carborundum Universal gains on strong Q4 result

Carborundum Universal advanced 3.75% to Rs 144 at 14:21 IST on BSE after consolidated net profit jumped 107.7% to Rs 24.94 crore on 9.7% rise in net sales to Rs 525.05 crore in Q4 March 2014 over Q4 March 2013.

The result was announced after market hours on Wednesday, 30 April 20140. The stock market was closed on Thursday, 1 May 2014 on account of May Day.

Meanwhile, the S&P BSE Sensex was up 12.53 points or 0.06% at 22,430.33

On BSE, so far 6,818 shares were traded in the counter as against average daily volume of 8,261 shares in the past one quarter.

The stock hit a high of Rs 150.80 and a low of Rs 141.10 so far during the day. The stock had hit a 52-week low of Rs 97 on 6 August 2013. The stock had hit a 52-week high of Rs 155.75 on 8 January 2014.

The stock had underperformed the market over the past one month till 30 April 2014, falling 5.45% compared with the Sensex's 0.35% rise. The scrip had also underperformed the market in past one quarter, falling 0.72% as against Sensex's 9.36% rise.

The small-cap company has equity capital of Rs 18.78 crore. Face value per share is Re 1.

Carborundum Universal's consolidated net profit rose 1.9% to Rs 91.51 crore on 7.8% rise in net sales to Rs 2093.88 crore in the year ended 31 March 2014 over the year ended 31 March 2013.

Carborundum Universal said that the increase in sales on full year basis was largely due to better performance by Electro Minerals division. The division witnessed better volumes in silicon carbide business in Russia and Zirconia business in South Africa. Abrasives division also registered growth. Ceramics segment, however degrew in sales due to postponement of projects in domestic market during most parts of the year. Profitability of Abrasives and Ceramics business came under pressure on a full year basis. However, Electro minerals business' profit margin improved on the back of higher volumes, Carborundum Universal said in statement.

Carborundum Universal managed its working capital well and repaid loans to improve standalone debt equity, which is at its lowest. The company, at consolidated level, spent Rs 94 crore on capital expenditure in the year ended 31 March 2014.

Sales of the abrasives business on a consolidated basis registered an increase of 6.2% on a full year basis. Sales for the year was Rs 860 crore (Rs 809 crore for the corresponding period of last year). However, profit before interest and tax on a consolidated basis recorded a drop of 27.5% i.e. from Rs 83 crore to Rs 60.1 crore. The division witnessed an increase in cost push which had an adverse impact on the profits.

Consolidated net sales of Electro Minerals business rose 21.1% to Rs 810 crore in Q4 March 2014 over Q4 March 2013. Profit before interest and tax on a consolidated basis recorded an increase, from Rs 23.7 crore to Rs 80.7 crore, on a full year basis. This was largely due to volume gain in both Russian and South African subsidiaries from a lower base in the corresponding year.

The ceramics segment recorded a 5.7% drop in sales on a full year consolidated basis (Rs 470.7 crore vs. Rs 499.1 crore last year). Refractories sales were lower owing to delayed project orders from user industries. Alumina Ceramics business from India, had challenges from market due to project postponements. However in the current quarter the business has delivered good growth both on a quarter on quarter basis and sequential basis. Australian entity registered lower sale. Profit before interest and tax of the ceramics business on a consolidated basis recorded a drop from Rs 78.9 crore to Rs 58.9 crore, on a full year basis.

The Board of Directors of the company at its meeting held on 30 April 2014 has recommended a final dividend of Rs 0.5 per share.

Carborundum Universal is a fully vertically integrated abrasives, electro-minerals, ceramics and refractory company with operations in Australia, Canada, China, India, Middle East, Russia, South Africa, Thailand and the US.

Powered by Capital Market - Live News