CUMI Standalone Topline up by 3% and PBT up by 15%
Consolidated PAT up by 6%


Chennai, October 30, 2009: The Board of Directors met today and approved the unaudited financial results for the quarter ended 30th September 2009.

Q2 Financial Overview

With the Indian economy showing signs of recovery, sales for the quarter at Rs.184 crores were 3% higher over the corresponding quarter of previous year. In the export markets, the Company benefited from the niche market approach adopted in certain product lines, which helped it to maintain export sales at the same level as the previous year, despite the impact of the recession continuing to linger in the overseas markets. On a sequential basis, sales for Q2 was 13% higher than Q1 of 2009-10.

Operating EBITDA grew by 14% (Rs.35 crores vs Rs.30.8 crores). EBITDA margins also improved to 19% from 17.3%. Depreciation was higher by Rs.1.7 crores (Rs.9.1 crores versus Rs.7.4 crores) as a result of the capital expenditure undertaken during the previous year. Interest cost was lower at Rs.5.9 crores (previous year Rs.6.6 crores) as a result of the soft interest rates prevailing in the economy.

Profit before tax grew by 15% over the corresponding quarter of last year (Rs.22.2 crores vs Rs.19.3 crores). Net profit grew by 11% (Rs.14.9 crores vs 13.4 crores).

Performance of Business Segments

With the Indian economy showing early signs of recovery, the Abrasives business performed well in meeting the peak sales performance of last year. In the direct customer segment, all major user industry segments registered good off-take. Sales for the quarter at Rs.109 crores was at last year levels. While off-take was good in the domestic market, the international sales continued to be lack-lustre, with sluggish demand from the European and North American customers.

The Ceramics business registered a 5% growth in sales (Rs.46 crores versus Rs.44 crores), aided by the strong performance of the Industrial Ceramics business (particularly Metallised Cylinders). Metallised Cylinders business has gathered good momentum with capacity utilization nearing peak levels. The products have gained good acceptance with several reputed customers. Sales of other Industrial Ceramics products were lower as there was a mixed performance from major user industries. While demand from power generation / distribution, cement and coal washery segments were good, order incoming from other market segments was lower. Efforts to address price sensitive market segments are yielding results. Sales of Super Refractories (including anti-corrosives business) was at last year levels. The new Super Refractories plant near Ranipet has stabilized production. Order incoming for fired products was lacklustre, as several customers were operating well below their peak capacities and also because of postponement of capital investments by some user industries.

The Electro-Minerals business continued its strong performance, with a 11% growth in sales over Q2 of last year (Rs.40 crores vs Rs.36 crores). Market for Brown Fused Alumina is positive with both abrasive and refractory customers commencing purchases. In Silicon Carbide microgrits, the addressable market segments were impacted by regulatory changes, inventory reductions at customer end and competition from substitute products. The project for establishment of a Silicon Carbide microgrit facility in the Cochin SEZ is progressing well. Given the current market conditions, it has been decided to implement the project in four phases. The first phase will be commissioned in November 2009.

Consolidated Performance

Consolidated Sales (incl. that of Joint Ventures) were Rs.325 crores (Rs.336 crores for Q2 of 08-09). While Electro-Minerals sales were maintained at last year levels (Rs.120 crores vs. Rs.118 crores), the abrasives segment registered lower sales (Rs.131 crores vs Rs.153 crores) with the Russian and North American industrial sector showing no signs of recovery. Sales performance of the overall Ceramics segment was flat (Rs.57 crores vs. Rs.59 crores) compared to the previous period. Strong performance in the Australian market helped offset the lower sales in the North American markets.

Volzhsky Abrasive Works, Russia delivered a very strong financial performance mainly due to high capacity utilization of the silicon carbide facilities and lower input costs. Fozkor Zirconia Pty Ltd., South Africa achieved a near break even performance in Q2 as against losses incurred in Q1 of current year. The Chinese joint venture continues to register losses due to lower capacity utilization of the abrasives and diamond tools facilities.

EBITDA was at Rs.61 crores (previous year Rs.57 crores), with EBITDA margins increasing from 17% to 19%. As a result of the improved EBITDA margins and the benefit of lower interest costs, profit before tax increased by 13% (Rs.45 crores vs Rs.40 crores). Consolidated PAT grew by 6% (Rs.26.5 crores versus Rs.25 crores).


While there are strong indications both from the government and industry that the Indian economy is emerging out of economic slowdown, the global market place is yet to experience signs of an economic revival. In India, there has been an increase in order inflows from various industrial segments. The Company has taken several initiatives in the first half like addressing new market segments, penetrating new geographies and undertaking retail initiatives and these are expected to help the Company to increase sales in the second half.

About Murugappa Group

Headquartered in Chennai, the Rs. 15,907 crores (USD 3.14 billion) Murugappa Group is one of India’s leading business conglomerates. Market leaders in diverse areas of business including Engineering, Abrasives, Finance, General Insurance, Cycles, Sugar, Farm Inputs, Fertilizers, Plantations, Bio-products and Nutraceuticals, its 29 companies have manufacturing facilities spread across 13 states in India. The organization fosters an environment of professionalism and has a workforce of over 32,000 employees. The Group has forged strong joint venture alliances with leading international companies like DBS Bank, Mitsui Sumitomo, Foskor, Cargill and Groupe Chimique Tunisien has consolidated its status as one of the fastest growing diversified business houses in India.

For further information, please contact:
V Ramesh,
Chief Financial officerCarborundum Universal Limited (CUMI)
Dare House, 234 NSC Bose Road,
Chennai – 600 001
Tel: 044 42216132/9940057663


Hanmer MS&L
Senthamil/ Neha / Ritu Bagri
Mobile: 99404 99456/ 9840246513 / 9884173290

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