Carborundum Universal: Buy (The Hindu Business Line 13th Jan 2008)Investors with a two-three year perspective can consider taking exposure to the stock of Carborundum Universal (CUMI), a leading player in the abrasives and industrial ceramics space. Ongoing expansion in capacity, growing focus on export markets, and a foray into the power tools business make CUMI an attractive investment. Besides, CUMI’s recent acquisition of VAW, a Russian abrasives manufacturer, also holds potential given the global shortage of alumina grains. At current market price of Rs 161, the stock trades at about 14 times its likely earnings for 2008-09. Investors can, however, accumulate the stock in lots given the volatility in the broad markets. With strong demand drivers in place, CUMI has embarked on a timely expansion in capacities. Apart from leveraging on the buoyant domestic demand, CUMI may also benefit from an increased exposure to exports. More
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