Grindwell Norton: ceramics and plastics take the lead

Grindwell Norton Limited (NSE: GRINDWELL) is gradually moving beyond conventional abrasives. The stock trades at 50.1 times earnings, below its five-year median of 61.8 times. What happened Q1 FY27 Abrasives revenue grew 10% to ₹386.9 crore. Ceramics and Plastics grew 18.8% to ₹353.9 crore. Digital Services grew 15.5% to ₹58.8 crore. The profit split tells the real story. C&P PBIT jumped 44.5% to ₹75 crore against abrasives PBIT of ₹49 crore, up 8.5%. C&P generates more profit than abrasives on a slightly lower revenue base. Between FY20 and FY26, C&P revenue grew at a 17.3% CAGR against 8.4% for abrasives. Why it matters China removed a 13% export VAT rebate on abrasives, giving near-term relief. The more important shift is Grindwell's own mix. C&P covers EV tapes, single-use biopharma tubings and silicon carbide for semiconductor equipment, where customer qualification matters more than price. My view C&P earns more profit than abrasives on lower revenue. It is in faster-growing markets where product know-how and approval cycles create real switching costs. The P/E at 50.1 times is below its five-year median of 61.8 times and the industry P/E of 69.9 times. That discount is unusual given C&P grows at 17% CAGR into semiconductor and biopharma markets. The risk remains: abrasives are still over half of revenue, and if global manufacturing slows, that half will show it first. What I am watching Q2 FY27 results, C&P growth above 18%, and the margin gap between C&P and abrasives widening. On the chart, ₹2,100 is the support level. My stance: Accumulate. The valuation discount to history and peers is not justified by the quality of the business. Disclosure: I do not hold a position in Grindwell Norton Limited at the time of writing. This is not investment advice.