• During 3QFY20, the company had witnessed revenue decline by 6% majorly impacted by decline in abrasive and electromineral segment by 12% and 8% YoY respectively. Abrasive growth was impacted by continued weakness in domestic demand coupled with lower off-take in Australian market.

• Lower take rate of ~27% in FY20 should lead to PAT growth of 9%.

• The healthy growth in Ceramics and refractories business should compensate near term growth headwinds faced in the abrasive segment due to broad based end sector weakness. Operating leverage should help sustain margins. The stock is assigning a multiple of 20x earnings.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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