Good afternoon, everyone. Welcome to the Q1 FY '27 earnings call of Carborundum Universal Limited.

From the management side today, we have Mr. Rangarajan, the Managing Director; and Mr.

Chandramouli, the Advisor. At this point, I'd like to hand over the call to the management for their opening remarks, post which we can take up the Q&A.

Thanks, and over to you, sir.

Good morning. I am Chandramouli.

Let us start the proceeding with the disclaimer. During this call, we may make certain statements which reflect our outlook for the future or which could be construed as forward-looking statements.

These statements are based on management's current expectations and are associated with uncertainties and risk are more fully detailed in our annual report, which may cause the actual result to differ. Hence, these statements must be reviewed in conjunction with the risk that the company faces.

Thank you.

Thank you. Good morning to all of you and a very warm welcome to our first-quarter earnings call.

I hope you and your family members are safe and doing well. We'll begin the call by providing an overview of the performance and then we will take up your questions.

To begin with, I'll start with the standalone performance. In Q1 FY '27, standalone sales were ₹846 crores compared to ₹698 crores in Q1 FY '26, which is a growth of 21.2%.

Growth at standalone level was broad-based and driven by all three segments. The electro minerals segment grew by 33%, ceramics segments grew by 15.2%, and abrasive segment grew by 14.7%.

On a sequential basis, standalone sales was ₹846 crores compared to ₹845 crores, almost flat. Sequential growth was driven by EMD, which grew by 12.2%, but ceramics segments declined, marking a decline of 1.6%, and abrasive also declined about 6.9%.

Both are due to seasonality of the business. Standalone profit after tax in Q1 FY '27, standalone PAT was ₹88 crores compared to ₹77 crores in Q1 FY '26 without the impact of one-time dividend of ₹68 crores received from a subsidiary in Q1 FY '26.

This marks a growth of 14.3% on a like-to-like basis. On a sequential basis, PAT declined by 28.3% from ₹120 crores in Q4 FY '26 to ₹88 crores in Q1 FY '27.

Profit of Q4 '26 included dividend income of subsidiaries and JVs of ₹30.5 crores compared to dividend income of ₹14.5 crores in Q1 FY '27. Besides this, it also reflects the seasonality of the business.

Consolidated sales in Q1 FY '27, consolidated sales were ₹1,411 crores compared to ₹1,207 crores in Q1 FY '26. This is a growth of 16.9%.

On a sequential basis, the consolidated sales grew by 2% from ₹1,383 crores to ₹1,411 crores. Consolidated profit after tax in Q1 FY '27, consolidated PAT was ₹76 crores compared to ₹62 crores in Q1 FY '26, which is a growth of 23.4%.

Sequentially, the company reported a PAT of ₹76 crores in Q1 FY '27 compared to a loss of ₹18 crores in Q4 FY '26. If you remember, consolidated PAT in Q4 '26 included exceptional items costs of about ₹135 crores related to CUMI Awuko Abrasives and Foskor Zirconia Pty Limited.

Segment results and PBIT of standalone, I will cover now. In Q1 FY '27, segment results of standalone increased by 24.1% from ₹106 crores in Q1 FY '26 to ₹132 crores.

Electro minerals PBIT increased from ₹7 crores to ₹39 crores, while ceramics and abrasive PBIT declined marginally to ₹59 crores and ₹34 crores, respectively. Standalone PBIT was ₹115 crores in Q1 FY '27 compared to ₹98 crores in Q1 FY '26, excluding the one-time dividend of ₹68 crores in Q1 FY '26.

On a sequential basis, segment results dropped by 9% from ₹145 crores to ₹132 crores, as higher EBIT in EMD and ceramic was offset by decline in abrasives. Electro minerals PBIT increased from ₹28 crores to ₹39 crores.

Ceramics PBIT increased from ₹57 crores to ₹59 crores, while abrasive PBIT declined from ₹60 crores to ₹34 crores. Segment results, PBIT of consolidated, I'll cover now.

In Q1 FY '27, segment result was ₹133 crores compared to ₹89 crores in Q1 FY '26 and ₹112 crores in Q4 FY '26. Q1 FY '26 consolidated PBIT was ₹114 crores compared to ₹81 crores in Q1 FY '26, marking a growth of 40.9%.

On a sequential basis, consolidated PBIT increased by 11.6% from ₹102 crores in Q4 FY '26 to ₹114 crores in Q1 FY '27. Now I'll cover the segment performance.

We'll take up first abrasive segment. Consolidated abrasives in Q1 FY '27, consolidated abrasive sales were ₹610 crores compared to ₹508 crores in Q1 FY '26, which is a growth of 20.1%.

On a sequential basis, sales remained flat at ₹610 crores. In Q1, standalone abrasives in Q1 FY '27, abrasives sales were ₹328 crores compared to ₹286 crores in Q1 FY '26, which is a growth of 14.7%.

Growth was driven both from domestic as well as export. On a sequential basis, sales declined by 6.9% from ₹353 crores in Q4 FY '26 to ₹328 crores in Q1 FY '27.

On a quarter-on-quarter basis, all segments contributed to the growth. Growth were predominantly volume driven and very small price increase.

I'll now cover the Rhodius Abrasives. In Q1 FY '27, Rhodius sales were €15.6 million compared to €13.2 million in Q1 FY '26, which is a growth of 18%.

In Q1 FY '26, sales had been impacted by an operational transformation of logistics or warehouse facility in the company. On a sequential basis, sales increased by 1.1% from €15.5 million in Q4 FY '26 to €15.6 million in Q1 FY '27.

Growth was more pronounced in INR terms on account of the depreciation of INR against euro. In INR terms, Q1 '27 sales was ₹172 crores compared to ₹128 crores in Q1 '26, marking a growth of 33.9%.

On a sequential basis, sales increased by 4.3% from ₹165 crores to ₹172 crores. In Q1 FY '27, Rhodius reported a loss after tax of €0.7 million compared to a loss after tax of €1.6 million in Q1 '26, representing an improvement of €0.9 million.

In Q4 '26, Rhodius recorded a PAT of €0.44 million. During the last call, we said Rhodius could grow by 5% in FY '27 and that there could be a small loss at the PAT level.

We maintain the same guidance. Now I'll move to CUMI Awuko Abrasives.

In Q1 FY '27, Awuko continued to operate to meet some of the fulfilling the existing orders that they have taken from the customers. Sales were €2.89 million compared to €2.6 million in Q1 FY '26, a growth of 11.1%.

On a sequential basis, sales increased by 9.9% from €2.63 million in Q4 FY '26 to €2.89 million in Q1 FY '27. In Q1 FY '27, Awuko reported a loss of loss after tax of €1.69 million compared to a loss of €0.9 million in Q1 FY '26.

On a sequential basis, the loss after tax excluding exceptional items from €2.63 million in Q4 '26 to €1.69 million in Q1 FY '27. In FY '26 Q4, CUMI International Limited, the holding company of Awuko, had approved to initiate the closure of the company through a voluntary winding-up process under the applicable laws in Germany.

Following this, exceptional items amounting to ₹119 crores were recognized in the consolidated P&L of CUMI in Q4 '26. We are trying our best to complete the process in a quarter or so.

We will update you when we meet in the next quarter. I'll cover the abrasives PBIT of standalone and consolidated.

At consolidated level, Q1 FY '27 PBIT was ₹40 crores compared to ₹11 crores in Q1 FY '26 and ₹32 crores in Q4 '26. PBIT for the quarter ended June 30th, 2026, included a gain of ₹25 crores from Sterling Abrasives Limited, a subsidiary of the company, arising from the transfer of leasehold rights of immovable property and related buildings.

At the standalone level, in Q1 FY '27, PBIT was ₹34 crores compared to ₹37 crores in Q1 FY '26. PBIT margin declined from 13.1% to 10.4%.

On a sequential basis, PBIT declined from ₹60 crores in Q4 FY '26 to ₹34 crores in Q1 FY '27, while PBIT margin declined from 17.1% to 10.4%. Last year full year, the PBIT margin of abrasives standalone was 15.3%.

Considering this, there's a drop of say ₹15 crores to ₹16 crores of PBIT in this quarter. The US-Iran conflict started in end Feb '26.

There was a truce in between, giving hope of normalization. April saw a nominal cost push.

May onwards, we've begun to see significant cost push. The overall cost push is around ₹16 crores.

Besides this, raw material cost push, normal inflationary cost push, and other costs were there. These were offset by the normal price increase realization that we had.

Compared to Q4, the drop in PBIT is due to volume drop and cost push. Normally, Q1 is a lower quarter compared to Q4 due to seasonality.

The volume drop impact the volume drop impact is around ₹8 to ₹9 crores. This, along with the cost push, are the reason for the drop in PBIT.

I will cover now the EMD segmental performance. Consolidated electro minerals: consolidated electro minerals sales were ₹473 crores compared to ₹405 crores in Q1 FY '26, which is a growth of 16.8%.

Growth was driven by standalone electro minerals, which saw strong demand both domestic and export. On a sequential basis, sales increased by 10.7% from ₹427 crores to ₹473 crores.

Standalone electro minerals: in Q1 FY '27, sales were ₹282 crores compared to ₹212 crores in Q1 FY '26, marking a growth of 33%. On a sequential basis, sales increased by 12.2% from ₹252 crores to ₹282 crores in Q1 FY '27.

Growth was largely volume driven, predominantly export-centric. VAW Russia: sales of VAW Russia was about RUB 1.58 billion compared to RUB 1.84 billion in Q1 FY '26, marking a drop of 14.1%.

In INR terms, Q1 FY '27 sales were ₹201 crores compared to ₹195 crores in Q1 FY '26, marking a growth of 3.1%. On a sequential basis, sales increased by 24.1% from RUB 1.27 billion in Q4 '26 to RUB 1.58 billion in Q1 FY '27.

In INR terms, on a sequential basis, sales increased by 34.4% from ₹149 crores to ₹201 crores. In Q1, PAT was RUB 52.1 million compared to RUB 71.5 million in Q1 '26.

I'll move to now Foskor Zirconia. In Q1 FY '27, Foskor recorded a sales of ZAR 107 million compared to ZAR 121 million in Q1 FY '26, marking a decline of 11.7%.

On a sequential basis, sales declined by 14.7% from ZAR 125 million in Q4 '26 to ZAR 107 million in Q1 '27. Foskor, a 51% subsidiary of CUMI International Cyprus, was determined commercially unviable due to sustained loss, rising input costs, and marketing pressures.

Accordingly, in FY '26 Q4, the consolidated FY '26 financials included ₹16 crores of asset write-down of various assets of Foskor Zirconia. We are evaluating all options and we expect to reach a solution in a quarter.

When we meet the next quarter, I'll update you the progress that we are making. Electro minerals PBIT, both standalone and consolidated: in Q1 FY '27, standalone electro minerals PBIT was ₹39 crores compared to ₹7 crores in Q1 FY '26.

On a sequential basis, PBIT increased by 40.3% from ₹28 crores to ₹39 crores in Q1 FY '27. Consolidated electro minerals PBIT was ₹22 crores in Q1 FY '27 compared to ₹4 crores in Q1 FY '26.

Consolidated PBIT of Q1 FY '27 had an impact of loss of ₹17 crores from Foskor Zirconia, which I just explained. On a sequential basis, consolidated PBIT increased by 14.9% from ₹19 crores to ₹22 crores.

I'll now move to ceramics. In Q1 FY '27, consolidated ceramic sales were ₹349 crores compared to ₹300 crores in Q1 FY '26, which is a growth of 16.5%.

On a sequential basis, ceramic segment sales decreased marginally from ₹351 crores to ₹349 crores. I'll cover the standalone ceramics now.

Standalone ceramic sales were ₹274 crores in Q1 FY '27 compared to ₹238 crores in Q1 FY '26, which is a growth of 15.2%. Quarter-on-quarter, growth was driven by industrial ceramics as well as the refractories business.

On a sequential basis, standalone ceramic sales declined by 1.6%, while industrial ceramics grew well, refractories had a sequential drop. Refractories business is project based and besides this, Q1, in general, is a lower quarter in refractories business.

I'll now cover the ceramics PBIT. Q1 FY '27 consolidated ceramics PBIT was ₹74 crores compared to ₹75 crores in Q1 FY '26, remaining broadly flat.

At standalone, PBIT was ₹59 crores compared to ₹62 crores in Q1 FY '26. PBIT of IC remained flat despite the top line going up.

Reasons are cost increase in fuel, alumina, unabsorbed costs in new lines of semicon and aerospace and defense capacities. We expect this to improve over the next few quarters.

We feel we'll be at higher end of the guidance at the full year. On a sequential basis, consolidated ceramic PBIT increased by 19.1% from ₹63 crores in Q4 '26 to ₹74 crores in Q1 '27.

Standalone ceramics PBIT increased by 3.5% from ₹57 crores to ₹59 crores. While IC PBIT grew up well, this was offset by the lower PBIT in refractories due to volume drop in say in line with the seasonality.

Consolidated capex in Q1 FY '27 was ₹53 crores compared to ₹64 crores in Q1 '26. We gave a guidance of ₹400 crores for the full year FY '27 and we keep the same guidance.

Consolidated debt-equity ratio is at 0.05. Unallocable expenses: standalone unallocable expense of Q1 FY '27 was ₹17 crores compared to unallocable income of ₹60 crores and unallocable income of ₹11 crores in Q4 FY '26.

The variance was primarily due to the dividend income received from a subsidiary in the comparative periods and the foreign exchange loss of ₹3.3 crores in the current year as against a foreign exchange gain in the comparative period. On a consolidated basis, unallocable expenses for Q1 FY '27 stood at ₹19 crores compared to ₹7.6 crores in Q1 '26 and ₹9.8 crores in Q4 '26.

The increase was mainly attributable to foreign exchange loss in the current quarter compared to the foreign exchange gain in the comparative periods, as well as the lower interest income during the current quarter. I'll quickly touch upon the guidance that we shared last time.

Consolidated sales: I communicated earlier that the consolidated sales could grow approximately 4% to 5%, 4% to 4.5% in Q1 sorry, in FY '27. However, if we exclude the revenue contribution from Foskor Zirconia and Awuko, which accounted for ₹343 crores in FY '26, and compare it with our business plan, the comparable growth will be 11% to 12%.

This is what we communicated. Given our current order load and forecast from customers, the growth could be 15% without the sales from Foskor and Awuko in both the periods.

Consolidated abrasives sales: I gave a guidance of 5.5% to 6%. However, if we exclude the revenue from Awuko, which is about ₹108 crores, the sales growth will be 11% to 12%.

I retain the same guidance. Consolidated ceramic sales: I earlier communicated the growth could be in the range of 15% to 15.5%.

We feel that this could go up to 23% to 25%. Consolidated electro minerals sales: the consolidated electro minerals, I communicated sales decline of 6.5% to 7% on account of the closure of Foskor Zirconia, which accounted for INR 235 crores in FY '26.

However, if we exclude the revenue contribution from Foskor and compare it with what we are planning to do in FY '27, the growth would be 8% to 9%. This could be 9% to 10% and we retain the same guidance.

Consolidated abrasive margin were expected to be around 9.5% to 10% in FY '26. The reported margin was 4.3%.

However, if we exclude the Awuko loss, the comparable margin for FY '26 would be 7.9%, we retain the earlier guidance. Consolidated ceramic margin were expected to be 20.5% to 21%.

We maintain our same guidance here. Consolidated electro minerals margin were expected to be 9% to 9.5%.

In FY '26, the reported margin was 5.6%. However, if we exclude the loss of Foskor Zirconia and compare it, the FY '26 margin would be 9.1%.

We retain the same guidance. We retain our capex guidance of about ₹400 crores in FY '27.

To sum it, I would say that we're doing well in all the four businesses in standalone. The program related to the closure of the two business are well on track and probably we will update you in next one quarter.

All the long-term strategy programs are being pursued in full earnest effort. Capex programs are going ahead as per plan.

That's a broad summary I would say, and now we will open up for Q&A. Thank you.

Hi, sir. Thanks for taking my question.

My first question is with respect to the standalone abrasives business. We had seen mid-teen kind of growth.

If you could give a flavor of how much would have been the value growth, volume growth in that? Directionally from a business perspective, how is the traction going on across each of the major sub-segments which are there?

Are we seeing market share gains from Chinese players in this, given the fact that there were some changes in Chinese incentive numbers which were given from April 1st onwards? If you can give a broad flavor on directionally how business is panning out with this segment.

Thank you, Ravi, for asking these questions. As I said that the growth is predominantly volume driven and we had a very small price growth.

The import competition from China, we just started seeing some easing out, but we need really wait and see. Because there's a lot of moving factors like our exchange rate also is not helpful.

There are multiple forces playing, we need to figure out what exactly is the reason for that. Is it the withdrawal of the export benefit from China, the exchange rate becoming unfavorable, etc.?

Overall, we see that it is a positive trend from our side.

Got it, sir. The second question is with respect to the ceramics business.

You have upped the guidance in terms of growth for that. Obviously, there are businesses attributed to the domestic market and also international market.

Within the ceramics business, you have wear ceramics, technical ceramics, metallized cylinder, etc. Out of these subcategories, where you are seeing better traction?

Are you seeing better growth prospects from the traditional private capex?

We see the growth optimism in all segments other than the wear segment, which is going to be a normal growth. This quarter we have seen after several quarters the growth in wear ceramics as well.

As you rightly said, the metallized cylinders, engineered ceramics, all segments are seeing increased growth momentum and hence we revised the guidance.

Okay. The growth in metal and engineered ceramics is coming from domestic market or exports?

It is predominantly export. Our business itself is predominantly export driven, as you know.

Those players who are international players having business in India also will form part of that trend.

Got it, sir. Yeah.

Thanks a lot.

Thank you. Hello?

Check.

Yes. Can you please continue?

Thank you very much for the opportunity. My first question is on ceramics.

You have mentioned three key elements for our future ceramics business: the components for semiconductor wafer fabrication equipment, aerospace and defense applications, and electronic substrates. Could you give some color on how FY '27 and FY '28 would look like in terms of revenue recognition from these segments?

Because I believe major part of qualifications as well as trials, I think we have already concluded.

Thank you, Harshit. There is three broad segment and I think of this, metallized substrate business, we are in the process of setting up the facility with one anchor customer with technology tie-up.

This program is right now on, we should see this coming up in FY '27, completing this whole program, and then the revenues would start coming in from '28 onwards. As far as the semiconductor wafer fab equipment components is concerned, I think we start supplying based on the qualification so far what we have got.

This year, it's going to be a very, very small part of the business. FY '26 will be small, sorry, FY '27 will be small.

FY '28, it will start picking up. I earlier communicated it will peak in FY '30.

This is how we are expecting this. Aerospace and defense also will be slightly better in this year, but again, the whole program will start kicking in '28 onwards because we are going through various sets of our own qualification as well as working with anchor customers in terms of being part of their own product.

Hence, this whole program will be spanning out like that.

Understood. Sir, is it right to understand that our whole guidance upgrade from 15 to 16% of ceramics revenue growth in FY '27 from 20 to 23 to 25%, this entire upgrade is coming from the SOFC ceramics at least a major part of that?

Would that be the right understanding?

It will be a combination of engineered ceramics, metallized cylinder, and as well as the SOFC ceramics.

Understood, sir. Sir, my second question is on electrominerals.

What are our plans for zirconia-based products, the calcia-stabilized zirconia and the monoclinic zirconia? Will we make these products in India once we have divested Foskor Zirconia?

Also, if you could share the progress on the divestment of Foskor as well.

The Foskor, as we discussed in the last call, we found that it is no more viable for us to run the business. We wanted to explore options of how do we proceed further.

We had a long discussion with our partners who are major players in South Africa, Foskor, and based on that, we now have a couple of options that are there in front of us that we would start exploring and trying to close this by Q2. That is our next one more quarter.

That's what is the current status that I can say. As far as the programs that you are describing about what we will do, I think maybe it would be comprehensive update that I will provide once we complete this process so that it will have all elements of what we are planning to do.

Understood, sir. Just a small follow-up on electrominerals.

This time, the standalone revenues grew a massive 33% YoY. Could you provide some broad mix between pricing mix and volumes for this particular quarter?

It's again, a big portion of it is volume, and there's some amount of mix which is also helping us because the treated product growth is on a higher side, so that also will give the margin growth. That's more driven as a product mix rather than as a price realization.

I would say sum and substance of this is volume driven, very, very little or no price increase. Mix is contributing to this.

Sir,

if there is not too much of a price increase in the electrominerals market, then why were our margins so much in pressure for the abrasives segment? I understand that the energy-related and other input costs as well were pretty much up.

Did it have a major portion coming out of higher electrominerals pricing for our abrasives segment? That is my last question.

Good.

Very good question, and I think of the cost of goods sold, somewhere between 80 to 85% will be grains and other related stuff, and that did not grow much, meaning we had a cost growth of let's call it 3 to 5%, which is predominantly offset by our own normal price increase. The rest of the stuff, which is all predominantly oil-based one, could be resins and related products, that grew up significantly in the month of May and June, particularly after this, the broker truce fell, and then again, heightened conflict started, really the market went up.

You all will know that the prices of oil went up during that time, particularly in the month of May, it reached $117 and then it slightly came down to $107. Those period truly cost.

A combination of this plus the fuel cost, which is again a significant portion, really contributed to the cost impact in abrasives.

Understood, sir. Thank you very much for answering my questions and all the very best.

Thank you.

Hi, sir. Thank you for taking my question.

First question on VAW. Now it's almost 1.5 year that the sanction is into effect on VAW.

Wanted to understand strategically how one should think of VAW in the medium to long term. Second, if you could touch upon the performance of VAW for this quarter.

Earlier, I think sales was mostly localized, what's the utilization and update on sales? Any changes or any update you would like to give on VAW?

Good. Thank you, Amit, for asking these questions.

No broader change in the way the Russian business is happening. It is predominantly domestic-centric business, and they continue to focus only on that, and so that no change since then.

You were asking about what is our view on this business. I think we have shared this in the earlier calls also when you asked a similar question last time.

I think, from our point of view, it is too difficult to predict what would happen in this geopolitical conflict. Our aim is to stay put, make sure that we comply with all laws, make sure that we comply with the local rules and regulations, and serve the domestic market and stay above the water.

Then see what happens to this. Fortunately, these people with even tough conditions they're trying their best and doing it properly in terms of profitability and cash flow.

That's what I would say at this point in time. It's tough times, but we need to kind of stay put and see what best we can do.

Right.

Second question, sir, on solid oxide fuel cells. Last time, you updated about the opportunities there.

I just wanted to understand can we expect a very strong growth, if possible for you to highlight the contribution and growth which can come from SOFC this year in the ceramics business?

I think when we earlier shared the guidance, which was for the ceramics business, and right now we said that we will make slightly up, the reason for making it up is a combination of the business growth that we are expecting from solid oxide fuel cells, ceramics, similarly metallized cylinders, and as well as the engineered ceramics. That is what it represents, and we are not sharing any individual details of how much of each of these business constitute.

Understood, sir. Sir, lastly on the guidance, comparable guidance of 11 to 12%.

I just wanted to understand how much volume growth we are expecting here and would there be, as you highlighted about the cost push, would there be any further scope of price increase? Wanted to understand volume versus price, what you're looking for for the full year in your guidance.

Right now I think we are looking at a normal price increases and predominantly a volume-driven growth. It's going to be tough for us to guess how long this war and what is the kind of impact it has.

Everyday it changes. When we go to sleep yesterday, it was different.

Today morning, it is different, where they are saying that we are not going to continue. It's going to be very tough, and it's going to be tough for us to say that based on which we will start putting up price, etc., is also going to be tough.

We will take it one quarter at a time and then we'll have to handle it. I'm not sure we will have any better model at this stage to start looking at this beyond at this point in time.

The sum and substance of the answer is it's predominantly volume-driven growth. Mix could help.

Volume is the predominant part, small price which normally that what we would factor in.

Understood, sir. Thank you, sir.

Thanks for answering my question.

Thank you.

Hi, good morning, sir. Most of my questions have been taken up.

Just if we exclude the ₹251 million sterling gain, the consolidated abrasives EBIT margin is close to 2.5% versus guidance of 9-10%. Any comments on that?

My comment was largely based on the fact that the losses of Awuko is not there. I still feel the same way, if you exclude that, we are still fine with that because we still have the losses even in this quarter, and hence you are looking at that way.

I still hold what I said.

Sure, sir. Sir, of the ₹400 cr capex, any breakdown of how much is going where for '27?

We gave a detailed listing last time in our earnings call, but I'll quickly cover that. It includes expansion in advance ceramics for power electronics, including substrate, metallized tubes, rings, brazed assemblies, expansion of brown fused alumina, addition of integrated furnace facility for thermal spray powders, zirconia furnace, grains.

No, sir, my question was how much will be allocated to the various projects?

We wouldn't be able to share project-wise details, Varun. I think Yeah, this is a broad guideline we can share.

No problem. Sir, and has CUMI received the [COMET?]

approval which is required for ballistic ceramics?

We have set of approvals which are required as per the industry standards, and those industry standards we have got already, and both domestic as well as the international standard. Most of the customers expect us to be having those standards that we should have.

That is what is required, and we are going by that. Some of these are all like NIJ 3, 4 levels.

Similarly, in terms of the BIS threat level 4 and 5. These are the basic standards that we meet, that your product should meet, and that's what we have basically tested ourselves in laboratories outside of India.

Got it. Sir,

just last one, this on a consol basis, unallocated expenses rose to close to ₹190 million for the quarter. What is the quarterly run rate we should incorporate, and for this quarter, was there some spike due to some one-off or something?

I covered in my earlier remark about what is that we are covering it in unallocated. Basically, this quarter, ₹19 crores, the increase was mainly attributable to the foreign exchange loss, and whereas it was a gain in the last comparable period, so that is the basic reason for that.

Sir. Got it.

Thank you, and all the best.

Thank you.

Thank you for the opportunity. Hi, sir.

I'm just trying to understand the broad capital allocation mindset of the group. How do you distinguish a temporary setback worth persisting through from a signal to change course or even exit?

Thank you.

Good conceptual question. I think the examples of what we took call in terms of Awuko and Foskor is an example where we feel that it is not a temporary setback.

We have given enough and more time for it to perform better, and at that point, we took a call saying that, look, it's no more an asset that we should want, and perhaps we should find the right owner for that asset. That's practically an example that I can share.

Temporary, many businesses go through that, these type of cycles within our own business itself. Even though it is called four business, each business has got sub-elements of it, and we continuously monitor and take a call, is it going to come back?

We always wait at least four to eight quarters to see whether these are temporary trends or are they fundamentally things are changing. Then we take a call whether it is the right one to continue or not.

That's very helpful, and thank you for sharing that. My second question is, in areas like semiconductors, aerospace, and defense, where CUMI has no material operating history to draw on, how do you make decisions before pattern recognition is available?

I think, again, a good question. We are not getting into semiconductor fab equipment manufacturing.

We are going to get into supplying of ceramics used in the semiconductor fab equipments. We have been manufacturing ceramics over 40, 50 years, and we have gained many expertise as well as patterns and know-hows in this field, and then we work through anchor customers to prove ourselves.

The product, when they kind of goes through a qualification and they feel we have the capability, etc., that is when we start working on an investment. We are not going kind of just without any experience.

Both the fields, we have a very core experience, and based on which we get into the next step out. It's more a adjacency that we get into it.

Sure. Understood.

Thank you so much for answering both questions. Thank you.

Thank you.

Hello, sir. Thanks for taking my question.

Sir, on metallized cylinders, we are the world's second largest producers. How much of the current growth and capex is driven by the global SF6 regulator phase-out, which is pushing the switchgear from gas insulated to vacuum interrupters?

Is that a structural trigger for medium term, and how do you see the demand runway for this?

I think the demand trend, what we are seeing definitely, in terms of generation and distribution coupled with the technology choices which are changing is a trend which is going to last for some time. Definitely, this is based on that.

Sir. My second question is in terms of tech developments, how do you see the Silicon Carbide Products LLC acquisition helping the overall portfolio?

Within these three segments like ceramics, abrasives, and electrominerals, can you quantify the same in which and how is it going to help us?

We acquired this niche company largely for the NBSIC refractories. Wherever there is going to be a wear as well as impact-based application is required, definitely this product stand out far better and compared to the traditional alumina-based product.

That's where the role of SCP comes, and they have been doing well both in terms of helping us securing certain critical businesses. We also feel that the other objective of them is to see how do we get an anchor into Americas using them as a key business focal point.

That is work in progress. We are progressing well towards that direction.

Thank you, sir. One last question on my part, sir.

With respect to CFRP composites, we are currently making that products for drones. Do we have the capability or any plans for commercial aerospace applications?

No, not yet. That takes time.

I think right now we have this capability and we will look into it based on our opportunity as well as the capital allocation.

Thank you so much. Thanks for answering my questions.

Thank you.

This is Aditya from Kotak Institutional Equities. I'll just go ahead with my questions and thanks for the opportunity.

The first part of what I wanted to get a sense of is standalone EMD and the strong revenue growth that is coming in. Could you give us a sense of how much is exports in this segment?

We understand last year the salience had gone up. Just trying to get a sense of how much is exports.

Should we be looking at this number because the standalone sales, if there's any interplay with intersegmentals and the growth is lower, would be useful to get your comments on both these things, sir.

The intersegmentals are always removed, Aditya, so that won't come into play. As for as the export saliency of this business is definitely has gone up.

What we used to be roughly in the range of about kind of 20%, we moved to last year to kind of 40% and now we are in that trajectory at this point in time. Last year 35% and we are getting into 40% trajectory.

Just related question over here. As we see through annual report, we sense that in Europe there is a move away from China and in electrominerals there could be benefits that come in your way as let's say entities from outside including CUMI get insights.

Is this opportunity already starting to pan out and can it add materially to your EMD growth from here on?

I'm sorry. You are not audible and the questions is not clear.

Could you be, please, slow and repeat the question?

Sure. Am I audible to you right now?

Now

right now better.

Thanks. Thanks for the patience over here.

What I was asking was a related question that in the EMD side, as the exports are growing, is it starting to benefit from, let's say, Europe and the duties being put on Chinese imports, specifically on the alumina side, and can that be a meaningful driver of your exports portfolio? That's a related question to the first one.

Yeah. The export growth of EMD is a consequence of long sustained effort that we have been making and reaching out to all the global players in Europe, and it goes through a qualification process establishing ourselves, it takes time.

That now with the coupled this opportunity definitely helps us, and we are definitely making use of it. We are also working similar effort in US as well as in Asia.

Thanks. The second question from my side would be on the semiconductor side of things.

Now we understand that ceramics for equipment is something that you're already working on. In the annual report, you also talk about two other things.

The first one being you having now a path towards 6N purity on the powder side, and then you working on certain substrates and materials and having tied up. My sense is this is again linked to semicon.

Could you give us a sense of how to think through these two different aspects which are an add-on to your current base equipment business? No,

we have been communicating this for quite some time. As we said earlier, we have established a 5N purity level and we now need to move to the 6N purity level.

It is enough to have 5N purity level to get into some of the SiC-based semiconductor products, but it is always good to have the 6N purity for which we now have kind of worked on certain options, and then we've kind of feel that comfortable that we should go ahead with that, and that's what annual report clearly says that. As far as the metallized substrate, that program we have been telling the last few calls even in the earlier question that I said.

This will be a program where technology tie-up is on, anchor customer is on. We are in the process of setting up the capability at this point in time, and we should start seeing these benefits in FY '28 onwards.

Is there a thought process of doing something inorganic on either of these three ventures? Let's say you start with the powder, go to the wafer stage in the silicon carbide side.

Is it something that the company thinks through?

Right now, our focus is that we should be a raw material supplier, and so we stay focused on that.

Thank you and all the very best to you.

Thank you, Aditya.

Hi, thank you for taking my questions. A quick one on the refractory segment.

I think you mentioned there's some volatility in terms of dispatches, etc., and at the same time, I think last time we guided we are expanding capacities over there. Just some color on longer term opportunity that you are seeing versus the near-term headwinds in that segment.

Thank you.

Thank you. I think even in this quarter, we have comfortably grown.

There's absolutely no issues. I was just saying compared to Q4, it's a seasonality.

It's always Q4, it's a higher quarter in refractory business. Whatever we communicated earlier in terms of our capacity expansion programs very much on, and we don't see any issues in that.

Understood. Thank you.

All the best.

Thank you.

Thank you. Thanks for taking my question again, sir.

Sir, my question is with respect to the JV we have, Murugappa Morgan Thermal Ceramics Limited, sir. Annual report mentions that we are serving thermal, fire, and EV applications.

Can you throw some light on the EV applications part?

We serve the thermal surge application and we are covering some of the leading auto players at this point in time and through the products that Morgan has got.

Sir. Any specific product like the substrates or anything?

No, it's a thermal paper which helps to address the surge of heat, particularly in the battery section, which is what is the product that we sell.

Thank you. Thank you so much, sir.

Thank you.

Thank you for all of your participation. I just like to summarize that we had a good growth both in terms of standalone and consolidated.

We've grown in all the three segments well. All the programs that we said we will do in terms of our long-term strategy is very much on.

Some of them hit the road, started seeing the benefit. We've shared more details in our annual report.

You could definitely go through this. We also feel that the capex program that we laid out for this year will definitely very much on and all of them are being pursued well.

At this point in time, I see that we are tracking to our trajectory and we are going well. The growth rate that we have targeted and communicated last quarter, we've slightly going it up at this point in time.

As we share more and probably in the next quarter, we will have more clarity and we will share a better update at this point in time. That's the broad summary I would like to leave it with you.

Thank you.