Carborundum Universal fourth quarter results

While the total income of the company was up by about 8% at Rs.703 crore in the fourth quarter, the net profits actually were marginally lower at Rs.61 crore. For the full year, the company has reported 14% growth in profits to Rs.247 crore. The company is a major manufacturer of abrasives in India and is part of the reputed Murugappa group of Chennai.

Should you hold on to Carborundum Universal at current prices?

AT the current market price of Rs.370, the company quotes at over 40 time’s historical earnings. With limited growth in top line and bottom line and limited price movement range, the stock may find it hard to really outperform the market over the next few quarter. If you were to look at the last four quarters, the pace of growth in sales and costs is almost at par leaving little scope for the company to expand margins. We would suggest looking for other options if you are really looking at outperformance.