Carborundum Universal Profit Drops 35% in Q2 FY26 Amidst Russian Sanctions Impact

Carborundum Universal Limited, a prominent entity within the Murugappa Group, has announced its financial results for the second quarter of the fiscal year 2026, ending September 30, 2025. The company reported a significant 35 per cent drop in its consolidated Profit After Tax (PAT), settling at ₹75 crore, a decrease from ₹116 crore in the same period last year. The standalone PAT also saw a reduction, falling to ₹64 crore from ₹86 crore.

The primary driver behind this profit contraction, as stated by the company, is the impact of international sanctions on its Russian subsidiary, which led to lower profitability. However, the company managed to register a slight growth in its top line, with consolidated revenue increasing by 1.9 per cent to ₹1,287 crore, up from ₹1,209 crore year-on-year. Standalone revenue also improved, reaching ₹698 crore from ₹664 crore.

For the first half of FY26, the consolidated PAT declined to ₹136 crore compared to ₹229 crore in the corresponding period of the previous fiscal. Consolidated revenue for the half-year period reached ₹2,493 crore, reflecting a growth of 4.2 per cent.

Segment-wise performance shows resilience in certain areas. The ceramics segment reported a 7.8 per cent year-on-year increase in consolidated revenue to ₹301 crore, driven by standalone ceramics and the Australian subsidiary. The abrasives segment posted a 7.4 per cent rise in consolidated revenue to ₹584 crore. The electrominerals segment, however, experienced flat year-on-year growth in consolidated revenue, amounting to ₹399 crore.

Impact This news can impact Carborundum Universal's stock performance as investors assess the profitability challenges, especially those stemming from geopolitical factors like sanctions. The decline in PAT, even with revenue growth, might lead to cautious sentiment. However, the performance of segments like ceramics and abrasives, along with revenue growth, could provide some counter-balance. The company's ability to mitigate risks from international operations will be crucial. Rating: 6/10.

Difficult terms with their meaning: Consolidated PAT: This refers to the combined net profit of a parent company and all its subsidiaries after accounting for all expenses and taxes. Standalone PAT: This is the net profit of the parent company alone, without including the profits or losses of its subsidiaries. Sanctions: These are commercial and financial penalties imposed by one or more countries against a targeted country, group, or individual. Subsidiary: A company that is owned or controlled by another company, known as the parent company. Revenue: The total amount of income generated by the sale of goods or services related to the company's primary operations. Electrominerals: These are minerals that are processed or produced using electrochemical methods, often involving high temperatures and electricity.