Grindwell Norton stock Fundamental View:

Grindwell Norton Limited (GNO) manufactures and sells abrasives, ceramics, and plastic products in India and internationally.

Grindwell Norton’s Performance Highlights, F.Y 2017:

Moderate Performance; Positive Outlook· Growth in volumes for abrasives due to recovery in capex cycle to help company’s revenue over next two fiscals

• Ceramics and plastics division to grow due to newer products and higher exports from the Halol Plant.
• Low risk business model with diversified clientele and no dominance of any single customer
• R&D arm of Saint Gobain group to help company innovate and capture market with newer and better products.
• Company’s internal accruals and cash abundance to help company grab opportunities in the market without stressing its balance sheet with debts.
• Strong financials with leverage free balance sheet, cash abundance, strong turnover, performance and return ratios

Summary: has given a robust fundamental performance consistently and would be a good buy for a long term.
The company holds No.2 position in abrasives and the top slot in Silicon Carbide. Along with key competitor Carborundum

Universal, it has close to 70% of the abrasives market, with each having almost equal share. Being a subsidiary of Saint Gobain, however, Grindwell enjoys a strong technological advantage over competitors. Its products find use across industries and sectors, thereby limiting its exposure to any particular sector or customer. The company’s dependence on any particular sector is limited to 15% and no single client contributes more than 3% to revenues. The company, which has its own Silicon Carbide grains manufacturing, is less dependent on external sources for raw materials as the company has a capacity to produce Silicon Carbide at its subsidiary in Bhutan and this helps to improve margins as well. We feel investors could buy the stock at the CMP and add on dips to Rs.365-370 band (~26x FY19E) for sequential targets of Rs.459.5 (32.5x FY19E) and Rs.487.5 (34.5x FY19E) over the next 2-3 quarters.

Grindwell Norton Stock technical view

COMPANY PROFILE OF GRINDWELL NORTON, NSE, INDIA
Grindwell Norton (GNO), a company listed on the Bombay and National Stock Exchanges, pioneered the manufacture of grinding wheels in India in 1941. Today, GNO’s businesses include: Abrasives, Silicon Carbide, High Performance Refractory’s, Performance Plastics and ADFORS. The Saint-Gobain Delegation (Country Head) office, and INDEC (the captive India IT Development Centre for the Saint-Gobain Group globally) are also part of GNO. GNO’s subsidiary, Saint-Gobain Ceramic Materials Bhutan Pvt. Ltd., manufactures Silicon Carbide. GNO is part of the Saint-Gobain Group. The Group currently holds 51.66% of the equity capital of GNO. GNO’s subsidiary, Saint-Gobain Ceramic Materials Bhutan Pvt. Ltd., manufactures Silicon Carbide. GNO holds 70% of the equity of this Company.