1. At a Glance – Old Money, New Headaches
Let’s set the mood. Carborundum Universal Ltd (aka CUMI) is the Murugappa Group’s industrial nerd — abrasives, ceramics, electro-minerals, no drama, no glamour, just grinding, polishing, and firing stuff at very high temperatures.
- Market Cap: ₹15,303 Cr
- CMP: ₹804
- 3-month return: -10.7%
- 1-year return: -30.9% (ouch)
- Q3 FY26 Sales: ₹1,291 Cr
- Q3 FY26 PAT: ₹73 Cr
- Trailing EPS: ₹12.68
- ROCE: 16.1%
- Debt: ₹308 Cr (basically harmless)
This is not a YOLO stock. This is the kind of company your CA uncle recommends while adjusting his spectacles. But at 63× earnings, the market seems to think this uncle is secretly a startup founder.
So… is CUMI an underrated industrial compounder going through a bad year, or a legacy business priced like it just discovered AI?
2. Introduction – When Consistency Meets Valuation Hangover
CUMI has existed since before your SIP started. It survived wars, commodity cycles, policy changes, and now… Russia sanctions.
The company operates across abrasives, electrominerals, industrial ceramics, and “others”, with revenue now 54% outside India — a big shift from FY22 when India was still the majority.
FY24 and FY25 were supposed to be steady years. Instead, FY25 TTM profit growth is -46%, margins are under pressure, and Q3 FY26 profits are lower YoY.
Yet the valuation never corrected fast enough.
That mismatch is the entire story of CUMI today.
Before judging, let’s understand what they actually do, because this is not a simple one-product company.
3. Business Model – WTF Do They Even Do?
Think of CUMI
as India’s industrial sandpaper empire, but with PhDs.
1️⃣ Abrasives – The Cash Cow With Calluses
- ~44% of revenue (Q2 FY25)
- Products: bonded abrasives, coated abrasives, super abrasives, metalworking fluids
- Over 30% domestic market share
- Global footprint boosted by RHODIUS & AWUKO (Germany) and PLUSS (India)
Grinding wheels may sound boring, but they are mission-critical for auto, engineering, and fabrication. No grinding = no manufacturing.
2️⃣ Electrominerals – Where Chemistry Meets Geopolitics
- ~29% of revenue
- Products: silicon carbide, zirconia, fused alumina
- 2nd largest silicon carbide producer globally
- Russia exposure via Volzhsky Abrasives Works → sanctions → impairments → profit pain
This segment is strategic but volatile. When it works, margins shine. When geopolitics hits, CFOs cry.
3️⃣ Industrial Ceramics – High IQ, Slow Growth
- ~22% of revenue
- Advanced ceramics, wear protection, metallized ceramics
- Leadership in Australia, strong presence in the US
Margins are good, but scale is slower. This is the “premium but patient” business.
4️⃣ Others – Side Quests
Power generation, IT services, phase-change materials. Small, experimental, not needle-moving yet.
Question: Which segment do
