How has been the historical performance of Carborundum Uni.?

Dec 02 2025 11:01 PM IST

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Carborundum Uni. has shown consistent growth in net sales, increasing from 2,598.97 Cr in March 2020 to 4,894.23 Cr in March 2025, but experienced a decline in profit margins and cash flow in the most recent year, with profit after tax falling to 253.50 Cr from 432.32 Cr. Overall, while sales and assets have grown, challenges in profitability and cash flow persist.

Revenue and Profit Growth

Over the seven-year period ending March 2025, Carborundum Uni. has seen its net sales nearly double, climbing from approximately ₹2,689 crores in 2019 to ₹4,894 crores in 2025. This robust increase reflects the company’s successful expansion and market penetration. Total operating income mirrored this trend, with no other operating income reported, indicating core business activities as the primary revenue source.

Operating profit before depreciation and interest (PBDIT) excluding other income rose from ₹438 crores in 2019 to ₹712 crores in 2025, although it peaked at ₹739 crores in 2024 before a slight dip. The operating profit margin, however, showed some contraction, declining from 16.5% in 2019 to 14.7% in 2025, suggesting rising costs or pricing pressures.

Profit after tax (PAT) increased from ₹228 crores in 2019 to ₹254 crores in 2025, with consolidated net profit reaching ₹293 crores in the latest fiscal year. Earnings per share (EPS) followed a similar pattern, rising from ₹13.09 in 2019 to ₹15.38 in 2025, though it peaked at ₹24.24 in 2024 before retreating. The PAT margin also contracted from 9.3% to 6.2% over the period, indicating tighter profitability despite higher absolute profits.

Cost Structure and Expenses

The company’s raw material costs have risen significantly, from ₹873 crores in 2019 to ₹1,688 crores in 2025, reflecting higher input prices or increased production volumes. Purchase of finished goods and employee costs have also increased steadily, with employee expenses more than doubling from ₹327 crores to ₹862 crores over the same period. Power costs remained relatively stable, fluctuating around ₹370-470 crores annually.

Other expenses have shown a marked increase, rising from ₹590 crores in 2019 to over ₹1,058 crores in 2025, which may have contributed to the compression in operating margins. Despite these rising costs, the company has managed to maintain a positive operating profit, supported by efficient management of stocks and other operational factors.

Balance Sheet and Asset Growth

Carborundum Uni.’s total assets have grown from ₹2,283 crores in 2020 to ₹4,521 crores in 2025, underscoring significant capital investment and expansion. Net block, representing fixed assets, more than doubled from ₹594 crores in 2020 to ₹1,612 crores in 2025, indicating ongoing capacity enhancement. Capital work in progress also increased, signalling continued investment in infrastructure.

Shareholder’s funds have expanded robustly, rising from ₹1,858 crores in 2020 to ₹3,529 crores in 2025, supported by growing reserves and retained earnings. Book value per share has appreciated from ₹98 in 2020 to ₹185 in 2025, reflecting enhanced net worth per share. The company’s long-term borrowings have fluctuated but remain modest relative to equity, with a notable reduction in total debt to zero by 2025, highlighting a strong deleveraging trend.

Cash Flow and Liquidity

Operating cash flow has shown variability, peaking at ₹601 crores in 2024 before declining to ₹304 crores in 2025. Investing activities consistently reflect cash outflows, indicative of ongoing capital expenditure. Financing activities have mostly been cash outflows, with the latest year showing a reduction of ₹109 crores, consistent with debt repayment and shareholder returns.

Despite a net cash outflow of ₹176 crores in 2025, the company maintains a healthy cash and bank balance of ₹378 crores, down from ₹557 crores the previous year. This liquidity position supports operational needs and investment plans.

Summary and Outlook

Carborundum Uni. has exhibited consistent growth in sales and profitability over the past several years, supported by strategic investments and expanding operations. While profit margins have experienced some pressure due to rising costs, the company’s ability to increase absolute profits and strengthen its balance sheet is notable. The reduction in debt and growth in shareholder equity enhance its financial stability.

Investors should consider the company’s solid asset base and cash flow generation capabilities alongside the margin trends when evaluating its long-term prospects. The steady increase in book value per share and earnings per share underscores value creation, although recent margin contractions warrant close monitoring.

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