Carborundum Universal: ceramics is the real growth leg

Carborundum Universal Limited (NSE: CARBORUNDUM) grew Q1 FY27 consolidated revenue 16.9% to ₹1,411 crore. The stock trades at 94.2 times earnings, against a five-year median of 55.8 times. What happened Abrasives grew 20% to ₹610 crore, ceramics 16% to ₹349 crore, and electrominerals 17% to ₹473 crore. Abrasives PBIT jumped 247% to ₹39.6 crore and electrominerals 400% to ₹22 crore. Ceramics held flat at ₹74.5 crore but at a 21% PBIT margin, the highest across all three segments. Management guides 23% to 25% ceramics growth in FY27 and is deploying ₹400 crore of capex into semiconductor and engineered ceramics capabilities. Why it matters China removed a 13% export VAT rebate on abrasives, lifting Indian manufacturers' pricing power. That is a near-term tailwind. The structural story is ceramics for wafer fabrication equipment, solid oxide fuel cells and aerospace. My view The abrasives profit jump came partly from an easy base and China's policy change. It will moderate as the base effect fades. Ceramics is the more durable part of this story. Long approval cycles and precision qualifications create switching costs. Ceramics at 21% PBIT margin against abrasives at around 6.5% shows where the value is. A P/E of 94 times is elevated against history, but the mix is changing. Five years ago this was a commodity abrasives business. It is now becoming an advanced materials company with semiconductor and aerospace exposure. What I am watching Q2 FY27 results, ceramics growth tracking above 20%, and capex converting into higher-margin lines. On the chart, ₹1,400 is support. My stance: Hold near ₹1,400. The ceramics pivot is the reason to stay. Disclosure: I do not hold a position in Carborundum Universal Limited at the time of writing. This is not investment advice.