Carborundum Universal Limited (CUMI) has reported a 6.4% year-on-year increase in consolidated sales for the second quarter of fiscal year 2026, despite challenges in its Russian subsidiary. The company's performance was driven by growth in its Abrasives and Ceramics segments, while maintaining its full-year guidance.

Financial Highlights

• Consolidated sales for Q2FY26 reached INR 1,287.00 crores, up from INR 1,209.00 crores in Q2FY25.
• Quarter-on-quarter growth of 6.6% from INR 1,207.00 crores in Q1FY26 to INR 1,287.00 crores in Q2FY26.
• Profit Before Interest and Tax (PBIT) for Q2FY26 stood at INR 111.00 crores, compared to INR 154.00 crores in the same period last year.
• H1FY26 consolidated sales grew by 4.2% to INR 2,493.00 crores from INR 2,393.00 crores in H1FY25.

Segment-wise Performance

Abrasives

• Q2FY26 sales grew by 7.4% to INR 584.00 crores from INR 543.00 crores in Q2FY25.
• Sequential growth of 15% from INR 508.00 crores in Q1FY26.
• H1FY26 sales remained flat at INR 1,091.00 crores compared to H1FY25.

Ceramics

• Q2FY26 sales increased by 7.8% to INR 301.00 crores from INR 280.00 crores in Q2FY25.
• H1FY26 sales grew by 9.4% to INR 601.00 crores from INR 549.00 crores in H1FY25.

Electrominerals

• Q2FY26 sales marginally declined by 0.9% to INR 399.00 crores from INR 402.00 crores in Q2FY25.
• H1FY26 sales grew by 2.6% to INR 804.00 crores from INR 783.00 crores in H1FY25.

Subsidiary Performance

RHODIUS Abrasives

• H1FY26 net sales decreased by 9% to EUR 30.60 million from EUR 33.80 million in H1FY25.
• Q2FY26 sales grew by 5.4% to EUR 17.40 million from EUR 16.50 million in Q2FY25.
• Sequential growth of 31.6% from EUR 13.20 million in Q1FY26, reflecting resolution of logistics challenges.

AWUKO

• H1FY26 sales grew by 5.3% to EUR 5.50 million from EUR 5.30 million in H1FY25.
• Q2FY26 sales increased by 31% to EUR 2.90 million from EUR 2.20 million in Q2FY25.

Volzhsky Abrasive Works (VAW)

• Q2FY26 sales in local currency declined by 37.2% due to ongoing sanctions.
• Management expects a 25% volume reduction for the full year.

Outlook and Guidance

• Maintained full-year guidance of 5.5-6.5% consolidated sales growth.
• Confirmed capex spending of INR 350.00 crores, with INR 162.00 crores already invested in H1FY26.
• Expects stronger performance in the second half, particularly in Ceramics driven by order backlogs.
• Anticipates sequential recovery in the Abrasives business.

Capital Expenditure and Future Plans

• Ongoing investments in semiconductor facilities, aerospace and defense, high-performance silicon carbide (HP SiC) facility, and thin wheel relocation.
• Focus on new areas such as ceramics for semiconductor fab equipment, with benefits expected from next year onwards.
• Aerospace and defense program investments on track, with contributions expected partly next year and mostly in the following year.

Mr. Sridharan Rangarajan, Managing Director of Carborundum Universal Limited, commented on the results, stating, "We are progressing based on our long-term trajectory. Our capex program is very much on track, and our balance sheet remains strong. We are working towards the goals set in our LTS 2030 strategy."

The company's performance demonstrates resilience in the face of global challenges, with strategic investments aimed at driving future growth across its diverse business segments.

Carborundum Universal Limited , a prominent industrial ceramics and abrasives manufacturer, has taken a significant step to support its South African subsidiary, Foskor Zirconia Pty Ltd (FZL). The company has issued a corporate guarantee of 50 million South African Rand (approximately ₹25.55 crores) in favor of Citibank N.A. for FZL's working capital facilities.

Key Details of the Corporate Guarantee

Implications and Risk Assessment

The corporate guarantee serves as a security measure for the working capital facility availed by FZL. In the event of a default by the South African subsidiary, Citibank N.A. has the right to invoke the guarantee against Carborundum Universal Limited for up to RAND 50 million.

This guarantee is being treated as a contingent liability in Carborundum Universal's financial records. This accounting treatment reflects the potential financial obligation that may arise if FZL fails to meet its debt obligations.

Regulatory Compliance

In line with regulatory requirements, Carborundum Universal has made this disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has confirmed that there is no involvement of the promoter, promoter group, or group companies in this transaction.

Conclusion

This move by Carborundum Universal demonstrates its support for its international operations, particularly in South Africa. While the guarantee provides financial backing for FZL's working capital needs, it also introduces a level of financial risk for the parent company. Stakeholders may monitor the performance of Foskor Zirconia Pty Ltd closely, given the potential implications for Carborundum Universal's financial position.