Another good quarter

Carborandum Universal recorded robust 32% growth in consolidated net sales to Rs. 465.29 crore for the quarter ended June 2011, on the back of in excess of 25% growth across all business segments. Abrasive business sales grew by 34% to Rs. 197.85 crore quarter ended June 2011, on the back of strong off-take from the user industries in India and Russia. In addition, Elecrominerals business sales grew by 33% to Rs. 176.3 crore on the back of robust performance of the Indian, Russian and South African operations. Further, Ceramics business grew by 27% to Rs. 101.04 crore mostly driven by the domestic market.

At Operating level, OPM expanded by 410 basis points to 20.8% on the back of cost containment across the business resulted operating profit to grew by strong 65% to Rs. 99.50 crore. However, At PBT level, profit grew by 20% to Rs. 80.19 crore on the back of no EO gain compared to Rs. 23.49 crore in the corresponding previous period.

Net sales grew by robust 32% to Rs. 465.29 crore for the quarter ended June 2011. Interestingly, OPM expanded by the 410 basis points to 20.8% on the back of 180 basis points fall in the employee cost as percentage to sales and net of stock adjustments. In addition, other expenses fell by 140 basis points and Power& Fuel expenses declined by 90 basis points. Thus, operating profit witnessed strong 65% growth to Rs. 99.50 crore. However, other income declined by the 42% to Rs. 1.31 crore.

With decline in interest cost by 4% to Rs. 6.58 crore and incline in depreciation by 13% to Rs. 14.04 crore, PBT before EO witnessed robust 86% growth to Rs. 80.19 crore. With no EO item compared to Rs. 23.49 crore EO gain in the corresponding previous period, PBT inclined by 20% to Rs. 80.19 crore. Further, the rise in tax rate by 150 basis points to 30.7% restricted the growth in PAT to 18% to Rs. 55.54 crore. After accounting Rs. 0.82 crore as Share of profit from the associates and Rs. 4.09 crore as minority interest, net profit witnessed 20% growth to Rs. 52.27 crore.

Revenues from Abrasive business (41% of sales) grew by 34% to Rs. 197.85 crore for the quarter ended June 2011, on the back of strong off-take from the user industries in India and Russia. Especially, The order inflow for non-standard bonded abrasive from both direct customers and trade channels was buoyant. Also, coated abrasives products registered strong growth primarily driven by the sheets and rolls segments. At PBIT level, margins witnessed sharp expansion of 470 basis points to 16.2% on the back of change in product mix and price increases resulting segment profit to surge by 88% to Rs. 32.04 crore. However, The operations in China, Middle East and Canada continued to be subdued though there were some improvements in the US operations.

Revenues from Electrominerals business (37% of sales) grew by 33% to Rs. 176.3 crore for the quarter ended June 2011, on the back of robust performance of the Indian, Russian and South African operations. The Indian operations recorded good growth in both domestic and export sales where as Russia sales growth was aided by higher realizations. Further, Captive sales also showed an improvement. At PBIT level, margins witnessed sharp 470 basis points expansion to 20.3% resulting segment profit to surge by 72% to Rs. 35.72 crore.