Carborundum Universal Ltd.: Turnover up by 23 per cent - Operating profit up by 38 per cent

July 23, 2004: The Board of Directors met today and approved the unaudited financial results for the quarter ended 30th June 2004.

Q1 performance
Owing to buoyancy in the user industries and the specific initiatives taken by the company, sales for Q1 increased from Rs. 62 crore to Rs. 76 crore, a growth of 23 per cent. The growth was witnessed not only in the domestic market but also in the export market, where sales registered an increase of 24 per cent.

Operating profits increased from Rs. 6.58 crore to Rs. 9.11 crore, a growth of 38 per cent. The improvement in profits resulted from higher sales volume, continuing improvements in production processes and higher power generation at Maniyar. Finance cost reduced from Rs.1.32 crore to Rs.0.61 crore.

Profit before exceptional items increased from Rs.5.26 crore to Rs.8.50 crore, an increase of 62 per cent. During the quarter there was an exceptional income of Rs.1.57 crore resulting from the sale of investment in Parrys Confectionery Ltd. Profit before tax was Rs.10.07 crore (previous year Rs.5.32 crore). Profit after tax was Rs. 7.30 crore (previous year Rs. 4.15 crore), an increase of 76 per cent.

Operations
All business segments achieved double digit growth. Abrasives, the largest business segment, grew by 28 per cent, followed by Electrominerals at 26 per cent and ceramics at 14 per cent. The growth is largely attributable to the strong demand pull from all major user industries like automobile, auto-components, construction and projects. In the export markets, there was good offtake of abrasives particularly from the American and European markets. The Company has also initiated several market and product related measures which contributed to the strong growth. Good monsoon in Kerala helped the Maniyar hydel power plant to increase generation from 26 million units to 80 million units. This also contributed to the increase in operating profits.

Outlook
The strong macro economic indicators are expected to drive user industry growth. The company has taken several steps to capitalize on this growth momentum and is confident of achieving higher growth levels in the ensuing quarters.

The unaudited financial results is enclosed.

Carborundum Universal Ltd. is part of the over US $ 1.2 billion Murugappa Group. A pioneer and market leader in several fields of business with manufacturing operations across 12 states in the country, the Group has a strong presence in Abrasives, Engineering, Bio-products, Sanitaryware, Sugar, Fertilizers, Pesticides, Finance, General Insurance, Plantations and Nutraceuticals.

For further details please contact:
Mr. P R Ravi
Tel: 044 25730044