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Continued losses at AUKO and FOSCAR
View Risks →Carborundum Universal Limited — Q3 FY26
Carborundum Universal reported consolidated Q3 FY26 revenue of ₹1,273 crore, up 2.5% YoY, with PAT of ₹76 crore (vs ₹35 crore in Q3 FY25, which included an exceptional item).
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Carborundum Universal reported consolidated Q3 FY26 revenue of ₹1,273 crore, up 2.5% YoY, with PAT of ₹76 crore (vs ₹35 crore in Q3 FY25, which included an exceptional item). Standalone revenue grew 5.6% YoY to ₹769 crore, with PBIT margin improving sequentially to 15%. Abrasives grew 9.8% YoY, driven by broad-based domestic demand, while ceramics declined 3.8% due to project delays in the US and refractory bunching. Electrominerals grew 8.9% YoY, supported by exports. Management revised consolidated PBIT margin guidance down to 7-8% (from 8.2-8.5%) and abrasive PBIT margin to 4-4.5% (from 6-6.5%). Key risks include continued losses at AUKO and FOSCAR, with potential divestment decisions pending. The EU FTA is seen as a positive for competitiveness.
कार्बोरंडम यूनिवर्सल ने तीसरी तिमाही में ₹1,273 करोड़ की कमाई की, जो पिछले साल से 2.5% ज्यादा है। मुनाफा ₹76 करोड़ रहा (पिछले साल ₹35 करोड़ था, जिसमें एक बार का खर्च शामिल था)। सिर्फ भारत के कारोबार में कमाई 5.6% बढ़कर ₹769 करोड़ हुई, और मुनाफा मार्जिन 15% हो गया। अपघर्षक (घिसने वाली चीजें) का कारोबार 9.8% बढ़ा, क्योंकि देश में मांग अच्छी थी। सिरेमिक का कारोबार 3.8% गिरा, क्योंकि अमेरिका में प्रोजेक्ट लेट हो गए। इलेक्ट्रोमिनरल्स 8.9% बढ़ा, जिसमें निर्यात ने मदद की। कंपनी ने मुनाफा मार्जिन का अनुमान घटाकर 7-8% कर दिया (पहले 8.2-8.5% था)। AUKO और FOSCAR में घाटा जारी है, और इन्हें बेचने पर फैसला होना बाकी है। अमेरिका-यूरोप व्यापार समझौते से प्रतिस्पर्धा बढ़ने की उम्मीद है।
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Standalone Abrasives Sales Growth
9.8%
+9.8% YoY
Standalone abrasives sales grew to ₹323 crore in Q3 FY26 from ₹294 crore in Q3 FY25.
Ceramics Standalone Sales Growth (QoQ)
11.9%
+11.9% QoQ
Standalone ceramics sales increased to ₹255 crore in Q3 FY26 from ₹228 crore in Q2 FY26.
VAW Sales Drop (YoY)
46%
-46% YoY
VAW sales fell to RUB 1.4 billion in Q3 FY26 from RUB 2.6 billion in Q3 FY25 due to US sanctions.
FOSCAR Sales Volume Growth (YoY)
22%
+22% YoY
FOSCAR volume grew 22% in Q3 FY26, but realizations fell 13% due to Chinese competition and rand appreciation.
What Changed vs Last Quarter
NEW
Consolidated sales growth guidance maintained at 5.5-6.5%
Management maintained the earlier guidance of 5.5% to 6.5% consolidated sales growth for FY26.
NEW
Ceramics consolidated sales growth revised to 13-14% from 16-18%
Ceramics sales growth guidance was marginally reduced from 16-18% to 13-14% for FY26.
NEW
Abrasives PBIT margin guidance revised to 4-4.5% from 6-6.5%
Abrasives PBIT margin guidance was lowered to 4-4.5% for FY26 from the earlier 6-6.5%.
NEW
Capex guidance maintained at ₹350 crore for FY26
Management maintained the full-year capex guidance of ₹350 crore, with ₹248 crore already spent in 9 months.
DROPPED
FY26 AUM growth of 20-22%
Management expects full-year AUM growth between 20% and 22%, with H2 stronger than H1.
DROPPED
FY26 ROA of 2.8%+
Return on assets guided to be 2.8% or higher for the full year, improving from 2.6% in Q2.
DROPPED
Credit cost range of 2.6-2.8% for H2 FY26
Credit cost expected to remain stable between 2.6% and 2.8% in the second half of the fiscal year.
DROPPED
Opex ratio to remain at 3.7-3.8%
Operating expense ratio guided to stay in the range of 3.7% to 3.8% for the full year.
NEW RISK
Continued losses at AUKO and FOSCAR
AUKO and FOSCAR continue to incur losses, with AUKO's loss before tax widening to €2.7 million in Q3 FY26. Management is evaluating options, including potential divestment.
NEW RISK
Project delays in US ceramics market
Ceramics growth is impacted by project delays in the US due to tariff uncertainty, leading to muted 9-month standalone growth of 1.7%.
NEW RISK
VAW sanctions impact
VAW sales dropped 46% YoY due to US sanctions imposed in January 2025, with no clear timeline for resolution.
NEW RISK
FOSCAR price pressure from Chinese competition
FOSCAR faces significant price pressure from Chinese competitors, with realizations down 13% despite volume growth of 22%.
RISK GONE
Elevated opex from collection infrastructure investments
Opex ratio increased to 3.7% due to investments in MSME sales and collection teams; if credit costs do not decline as expected, profitability could be pressured.
RISK GONE
Higher credit cost in intermediate retail segment
Credit cost in the intermediate retail segment was elevated due to prudent provisioning; analyst questioned sustainability, management cited management overlays.
RISK GONE
Slowdown in fee-based business growth
Fee income was subdued at 6% of AUM due to cautious underwriting and slow credit demand; management expects improvement in H2 but risk of delayed recovery.
RISK GONE
MFI portfolio stress despite CGFMU cover
MFI credit cost improved but remains elevated at 5.1%; reliance on CGFMU guarantee may not fully offset underlying asset quality risks.
Fast read
Guidance and risk preview
Management maintained the earlier guidance of 5.5% to 6.5% consolidated sales growth for FY26.
AUKO and FOSCAR continue to incur losses, with AUKO's loss before tax widening to €2.7 million in Q3 FY26.
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