Shares of leading materials sciences engineering solutions provider Carborundum Universal Ltd. (CUMI) ended higher on Friday after Kotak Securities upgraded its rating on the stock from buy to add and raised the target price to Rs 975 from Rs 897.
The Murugappa group company is a mine-to-market conglomerate with integrated operations in mining, power generation, fusion, manufacturing, marketing, and distribution.
Kotak Securities in a research note said that it expects the company to continue adding and acquiring capabilities across segments.
The brokerage firm stated that CUMI, which produces products like abrasives, ceramics, refractories, and machine tools among others, is considering investing and accelerating its growth. The brokerage however cautioned on timing and prioritising investments.
Kotak Securities also expects the acquisitions in the abrasives segment to contribute to growth.
Carborundum Universal in February this year announced acquisitions of two Germany-based abrasives companies for a total of Rs 532 crore.
Kotak Securities mentioned that the company has meaningfully reduced energy and water consumption for brown-fused alumina and has increased yields, which would reduce cost and carbon footprint.
It also sees that benefits from linked businesses have started to flow through and will accelerate.
The Murugappa Group enterprise reported an 8 percent decline in consolidated net profit to Rs 93.69 crore in the September quarter compared to Rs 102.68 crore during the year-ago quarter. Consolidated sales were up by 34 percent at Rs 1,117 crore from Rs 834 crore in the year-ago period.
Shares of CUMI ended 1.76 percent higher at Rs 852.70 on Friday.
