Carborundum Universal Ltd Q2FY26 – The Murugappa Megabrain Takes a Russian Hit but Still Grinds Its Way Through a Tough Quarter
1. At a Glance
Picture this: a 120-year-old Indian industrialist with the precision of a surgeon and the stubbornness of an auto mechanic, suddenly tripped by a geopolitical banana peel in Russia. That’s Carborundum Universal Ltd (CUMI) for you this quarter.
At ₹925 per share, with a market cap of ₹17,619 crore, the stock has been like that student who peaked in FY24 and is now avoiding eye contact with investors — down 34.7% in a year. Q2FY26 revenue stood at ₹1,287 crore (up 6% YoY), but PAT tumbled 35.7% YoY to ₹75 crore, bruised by sanctions on its Russian subsidiary, Volzhsky Abrasive Works (VAW).
The P/E ratio sits at an eyebrow-raising 70.5x, a reminder that the market is still paying a premium for Murugappa discipline and the “cleanest balance sheet in abrasives.” With ROCE at 16.1%, ROE at 10.8%, and debt-to-equity of 0.06, this company could practically float if debt were water.
So, why the fall? Simple. Sanctions cut into the high-margin Russian operations like a blunt knife through fused alumina. Yet, with 18,000 retail outlets, 60,000 end-users, and plants from India to Germany to South Africa, CUMI’s grit (literally and metaphorically) remains unmatched.
Still, one question lingers — can an abrasive company polish its way out of a sanctions crisis?
2. Introduction – The Gritty Gentleman of Guindy
Let’s talk legacy. CUMI, born in 1954, is the grand old craftsman of India’s industrial products — making everything from abrasives to ceramics to electrominerals. It’s like the quiet IIT topper who doesn’t boast, just keeps shipping tonnes of silicon carbide and zirconia worldwide.
A Murugappa Group company (and they don’t do drama — only dividends), CUMI has turned abrasives into an art form. You’ll find its products shaping the interiors of Tata Motors, grinding turbine blades, and even whispering quietly inside industrial ceramics labs in Australia.
But lately, it’s been less “Carborundum Universal” and more “Carborundum Interplanetary” — buying up companies in Germany (Rhodius Abrasives), the USA (Silicon Carbide Products), and India (PLUSS Advanced Technologies). Clearly, it believes expansion should be as global as its grit.
Yet, FY26 began with friction. Russia — home to its prized mineral subsidiary — got caught in the geopolitical meat grinder. Result? Impairments, sanctions, and investor migraines.
But before you start writing obituaries, remember: CUMI has survived oil shocks, recessions, and a few of its own CFO resignations. It may not be flashy, but it’s the kind of company your portfolio marries for stability, not excitement.
Still, can discipline and diversification outshine sanctions and slowdown?
3. Business Model – WTF Do They Even Do?
Ever looked at sandpaper and thought, “There’s money in this”? CUMI did — and built an empire out of it.
Here’s their business in plain English with a side of sarcasm:
Abrasives (44% of revenue) – They make things that make other things smoother. Bonded, coated, or super — if it grinds, cuts, or polishes, CUMI probably made it. With 30% market share, it’s the desi boss of abrasives. The segment grew 63% between FY22–FY24, fueled by acquisitions and a post-COVID industrial boom.
Electrominerals (29%) – Fancy word for making the magic dust (like silicon carbide and alumina) that goes into everything from jet engines to semiconductor fabs. CUMI is the second-largest producer of silicon carbide globally — not bad for a Chennai boy.
Industrial Ceramics (22%) – The serious stuff. High-end ceramics for wear resistance, precision engineering, and even metalized ceramics. The company dominates Australia in this space.
Others (5%) – Includes IT services, renewable power, and phase-change materials — because every good industrial giant needs a hobby.
Their reach is global — 46% of FY24 revenue from India and 54% from the rest of the world. From Guindy to Germany, they operate 12 abrasive plants, 8 electromineral sites, and 2 ceramic facilities.
Essentially, CUMI sells the picks, not the gold. Whether you’re a carmaker, turbine builder, or semiconductor lab — you’ll probably use something they’ve made.
So, if this sounds boring, remember: boring businesses often mint the most reliable money.
Commentary: CUMI’s quarter looked like a bad Indian Premier League midseason — revenue okay, margins collapsing, fans confused. Sanctions on its Russian unit and weaker European demand hit profits. But hey, EBITDA bounced back 29% QoQ, showing some life in the domestic and ceramic business.
Who knew abrasives could give such emotional volatility?
