Ladies and gentlemen, good day and welcome to the Carborundum Universal Q1 FY 2027 earnings conference call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kunal Shah from DAM Capital Advisors Limited. Thank you, and over to you, sir.
Good afternoon, everyone. Welcome to the Q1 FY 2027 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'm 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 risks 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 risks 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 will start with the standalone performance. In Q1 FY 2027, standalone sales were INR 846 crore, compared to INR 698 crore in Q1 FY 2026, 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 segment grew by 15.2%, and Abrasives segment grew by 14.7%. On a sequential basis, standalone sales was INR 846 crore compared to INR 845 crore, so almost flat.
Sequential growth was driven by EMD, which grew by 12.2%. The ceramic segments declined, marking a decline of 1.6%. Abrasive also declined about 6.9%. Both are due to seasonality of the business. Standalone Profit After Tax in Q1 FY 2027, standalone PAT was INR 88 crore compared to INR 77 crore in Q1 FY 2026. Without the impact of one-time dividend of INR 68 crore received from a subsidiary in Q1 FY 2026. This marks a growth of 14.3% on a like-to-like basis. On a sequential basis, PAT declined by 28.3% from INR 120 crore in Q4 FY 2026 to INR 88 crore in Q1 FY 2027. Profit of Q4 2026 included a dividend income of subsidiaries and JVs of INR 30.5 crore compared to a dividend income of INR 14.5 crore in Q1 FY 2027.
Besides this, it also reflects the seasonality of the business. Consolidated sales in Q1 FY 2027, consolidated sales were INR 1,411 crore compared to INR 1,207 crore in Q1 FY 2026. This is a growth of 16.9%. On a sequential basis, the consolidated sales grew by 2% from INR 1,383 crore to INR 1,411 crore. Consolidated Profit After Tax in Q1 FY 2027, consolidated PAT was INR 76 crore compared to INR 62 crore in Q1 FY 2026, which is a growth of 23.4%. Sequentially, the company reported a PAT of INR 76 crore in Q1 FY 2027 compared to a loss of INR 18 crore in Q4 FY 2026. If you remember, consolidated PAT in Q4 2026 included exceptional items, costs of about INR 135 crore related to CUMI AWUKO Abrasives and Foskor Zirconia Private Limited.
Segment result and PBIT of standalone I will cover now. In Q1 FY 2027, segment results of standalone increased by 24.1% from INR 106 crore in Q1 FY 2026 to INR 132 crore. Electro Minerals PBIT increased from INR 7 crore to INR 39 crore, while ceramics and abrasive PBIT declined marginally to INR 59 crore and INR 34 crore respectively. Standalone PBIT was INR 115 crore in Q1 FY 2027 compared to INR 98 crore in Q1 FY 2026, excluding the one-time dividend of INR 68 crore in Q1 FY 2026. On a sequential basis, segment results dropped by 9% from INR 145 crore to INR 132 crore. Higher EBIT in EMD and ceramic was offset by decline in abrasives. Electro Minerals PBIT increased from INR 28 crore -INR 39 crore.
Ceramics PBIT increased from INR 57 crore -INR 59 crore, while Abrasive PBIT declined from INR 60 crore -INR 34 crore. Segment result PBIT of consolidated I will cover now. In Q1 FY 2027, segment result was INR 133 crore compared to INR 89 crore in Q1 FY 2026 and INR 112 crore in Q4 FY 2026. Q1 FY 2026 consolidated PBIT was INR 114 crore compared to INR 81 crore in Q1 FY 2026, marking a growth of 40.9%. On a sequential basis, consolidated PBIT increased by 11.6% from INR 102 crore in Q4 FY 2026 -INR 114 crore in Q1 FY 2027. Now I will cover the segment performance. We will take a first Abrasive segment. Consolidated abrasives in Q1 FY 2027. Consolidated Abrasive sales were INR 610 crore compared to INR 508 crore in Q1 FY 2026, which is a growth of 20.1%.
On a sequential basis, sales remained flat at INR 610 crore. In Q1 standalone abrasives, in Q1 FY 2027, Abrasives sales were INR 328 crore compared to INR 286 crore in Q1 FY 2026, 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 INR 353 crore in Q4 FY 2026 to INR 328 crore in Q1 FY 2027. 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 2027, Rhodius sales were EUR 15.6 million compared to EUR 13.2 million in Q1 FY 2026, which is a growth of 18%. In Q1 FY 2026, 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 EUR 15.5 million in Q4 FY 2026 to EUR 15.6 million in Q1 FY 2027. Growth was more pronounced in INR terms on account of the depreciation of INR against EUR. In INR terms, Q1 FY 2027 sales was INR 172 crore compared to INR 128 crore in Q1 FY 2026, marking a growth of 33.9%. On a sequential basis, sales increased by 4.3% from INR 165 crore to INR 172 crore. In Q1 FY 2027, Rhodius reported a loss after tax of EUR 0.7 million compared to loss after tax of EUR 1.6 million in Q1 FY 2026, representing an improvement of EUR 0.9 million. In Q4 FY 2026, Rhodius recorded a PAT of EUR 0.44 million.
During the last call, we said Rhodius could grow by 5% in FY 2027 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 2027, AWUKO continued to operate to meet some of the fulfilling the existing orders that they have taken from the customers. Sales were EUR 2.89 million compared to EUR 2.6 million in Q1 FY 2026, a growth of 11.1%. On a sequential basis, sales increased by 9.9% from EUR 2.63 million in Q4 FY 2026 - EUR 2.89 million in Q1 FY27. In Q1 FY 2027, AWUKO reported a loss after tax of EUR 1.69 million compared to a loss of EUR 0.9 million in Q1 FY 2026.
On a sequential basis, the loss after tax, excluding exceptional items from EUR 2.63 million in Q4 FY 2026 -EUR 1.69 million in Q1 FY 2027. In FY 2026 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 INR 119 crore were recognized in the consolidated P&L of CUMI in Q4 FY 2026. 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 2027 PBIT was INR 40 crore, compared to INR 11 crore in Q1 FY 2026 and INR 32 crore in Q4 FY 2026.
PBIT for the quarter ended June 30th, 2026 included a gain of INR 25 crore from selling Sterling Abrasives Limited, a subsidiary of the company, arising from the transfer of leasehold rights of immobile property and related buildings. At the standalone level in Q1 FY 2027, PBIT was INR 34 crore compared to INR 37 crore in Q1 FY 2026. PBIT margin declined from 13.1% - 10.4%. On a sequential basis, PBIT declined from INR 60 crore in Q4 FY 2026 to INR 34 crore in Q1 FY 2027, while PBIT margin declined from 13.1% - 10.4%. Last year full year, the PBIT margin of Abrasives standalone was 15.3%. Considering this, there is a drop of say, INR 15 crore -INR 16 crore of PBIT in this quarter. The U.S.-Iran conflict started in end February 2026.
There was a truce in between, giving hope of normalization. April saw a nominal cost push. May onwards, we began to see a significant cost push. The overall cost push is around INR 16 crore. Besides this raw material cost push, normal inflationary cost push on the 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 is around INR 8 crore to INR 9 crore. This, along with the cost push, are the reason for the drop in PBIT. I will cover now the Electro Minerals segmental performance. Consolidated Electro Minerals.
Consolidated Electro Minerals sales were INR 473 crore compared to INR 405 crore in Q1 FY 2026, 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 INR 427 crore -INR 473 crore. Standalone Electro Minerals in Q1 FY 2027, sales were INR 282 crore compared to INR 212 crore in Q1 FY 2026, marking a growth of 33%. On a sequential basis, sales increased by 12.2% from INR 252 crore -INR 282 crore in Q1 FY 2027. 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 2026, marking a drop of 14.1%.
In INR terms, Q1 FY 2027 sales were INR 201 crore compared to INR 195 crore in Q1 FY 2026, marking a growth of 3.1%. On a sequential basis, sales increased by 24.1%, from RUB 1.27 billion in Q4 2026 -RUB 1.58 billion in Q1 FY 2027. In INR terms, on a sequential basis, sales increased by 34.4%, from INR 149 crore -INR 201 crore. In Q1, PAT was RUB 52.1 million compared to RUB 71.5 million in Q1 2026. I will move to now Foskor Zirconia. In Q1 FY 2027, Foskor recorded a sales of ZAR 107 million compared to ZAR 121 million in Q1 FY 2026, marking a decline of 11.7%. On a sequential basis, sales declined by 14.7% from ZAR 125 million in Q4 2026 to ZAR 107 million in Q1 2027. Foskor, a 51% subsidiary of CUMI International Limited, was determined commercially unviable due to sustained loss, rising input costs and marketing pressures.
Accordingly, in FY 2026 Q4, the consolidated FY 2026 financials included INR 16 crore of assets write-down of various assets of Foskor Zirconia. We are evaluating all options, and we expect to reach a solution in a quarter. And when we meet the next quarter, I will update you the progress that we are making. Electro Minerals PBIT, both standalone and consolidated. In Q1 FY 2027 standalone Electro Minerals PBIT was INR 39 crore compared - INR 7 crore in Q1 FY 2026. On a sequential basis, PBIT increased by 40.3% from INR 28 crore -INR 39 crore in Q1 FY 2027. Consolidated Electro Minerals PBIT was INR 22 crore in Q1 FY 2027 compared to INR 4 crore in Q1 FY 2026. Consolidated PBIT of Q1 FY 2027 had an impact of loss of INR 17 crore from Foskor Zirconia, which I just explained.
On a sequential basis, consolidated PBIT increased by 14.9% from INR 19 crore to INR 32 crore. I will now move to Ceramics. In Q1 FY 2027, consolidated Ceramics sales were INR 349 crore compared to INR 300 crore in Q1 FY 2026, which is a growth of 16.5%. On a sequential basis, Ceramics segment sales decreased marginally from INR 351 crore -INR 349 crore. I will cover the standalone Ceramics now. Standalone Ceramics sales were INR 274 crore in Q1 FY 2027 compared to INR 238 crore in Q1 FY 2026. This 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 Ceramics 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 will now cover the Ceramics PBIT. Q1 FY 2027 consolidated Ceramics PBIT was INR 74 crore compared to INR 75 crore in Q1 FY 2026, remaining broadly flat. Standalone PBIT was INR 59 crore compared to INR 62 crore in Q1 FY 2026. PBIT of IC remained flat despite the top line going up. The reasons are cost increase in fuel, alumina, and absorbed costs in new lines of semicon and aerospace and defense capacities. We expect this to improve over the next few quarters. We feel we will be at higher end of the guidance at the full year. On a sequential basis, consolidated Ceramics PBIT increased by 19.1% from INR 63 crore in Q4 FY 2026 to INR 74 crore in Q1 FY 2027. Standalone Ceramics PBIT increased by 3.5% from INR 57 crore -INR 59 crore.
While IC PBIT grew up well, this was offset by the lower PBIT in refractories due to volume drop in line with the seasonality. Consolidated CapEx in Q1 FY 2027 was INR 53 crore, compared to INR 64 crore in Q1 FY 2026. We gave a guidance of INR 400 crore for the full year FY 2027, and we keep the same guidance. Consolidated debt-to-equity ratio is at 0.05. Unallocable expenses. Standalone unallocable expense of Q1 FY 2027 was INR 17 crore compared to unallocable income of INR 60 crore and unallocable income of INR 11 crore in Q4 FY 2026. The variance was primarily due to the dividend income received from a subsidiary in the comparative periods and the foreign exchange loss of INR 3.3 crore in the current year as against the foreign exchange gain in the comparative period.
On a consolidated basis, unallocable expenses for Q1 FY 2027 stood at INR 19 crore compared to INR 7.6 crore in Q1 FY 2026 and INR 9.8 crore in Q4 FY 2026. 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 will quickly touch upon the guidance that we shared last time. Consolidated sales, I communicated earlier that the consolidated sales could grow approximately 4%-4.5% in FY 2027. However, if we exclude the revenue contribution from Foskor Zirconia and AWUKO, which accounted for INR 343 crore in FY 2026, and compare it with our business plan, the comparable growth will be 11%-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%-6%. However, if we exclude the revenue from AWUKO, which is about INR 108 crore, the sales growth will be 11%-12%. I retain the same guidance. Consolidated Ceramics sales, I earlier communicated the growth could be in the range of 15%-15.5%. We feel that this could go up to 23%-25%. Consolidated electromineral sales. The consolidated Electro Minerals, I communicated sales decline of 6.5%-7% on account of the closure of Foskor Zirconia, which accounted for INR 235 crore in FY 2026. However, if we exclude the revenue contribution from Foskor and compare it with what we are planning to do in FY 2027, the growth would be 8%-9%.
This could be 9%-10%, and we retain the same guidance. Consolidated abrasive margin were expected to be around 9.5%-10% in FY 2026. The reported margin was 4.3%. However, if we exclude the AWUKO loss, the comparable margin for FY 2026 would be 7.9%. We retained the earlier guidance. Consolidated ceramic margin were expected to be 20.5%-21%. We maintain our same guidance here. Consolidated electromineral margin were expected to be 9%-9.5%. In FY 2026, the reported margin was 5.6%. However, if we exclude the loss of Foskor Zirconia and compare it, the FY 2026 margin would be 9.1%. We retain the same guidance. We retain our CapEx guidance of about INR 400 crore in FY 2027.
To sum it, I would say that we are doing well in all the four businesses in standalone, and the program related to the closure of the two business are well on track and probably we'll update you in next one quarter. All the long-term strategy programs are being pursued in full effort. CapEx programs are going ahead as per plan. That's a broad summary I would say, and now we'll open up for Q&A. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Ravi from Avendus Spark. Please proceed.
Hi, sir. Thanks for taking my question. My first question is with respect to the standalone abrasive business. We have seen maintained 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's the traction going on across each of the major subsegments which are there? Are we seeing market share gains from Chinese players 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 in this segment.
Thank you, Ravi, for asking these questions. As I said, the growth predominantly is volume driven. We had a very small price growth. The import competition from China, we just started seeing some easing out, but we need to 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 withdrawal of the export benefit from China? Say, the exchange rate becoming unfavorable, et cetera. 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 ceramic cylinder, et cetera. 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. Definitely, 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 metallized 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.
Hello. Yes, sir.
Yes.
So-
Can you please continue? Yeah.
Yeah, sure. The next participant is from the line of Harshit Patel from Equirus Securities . Please proceed.
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 2027 and FY 2028 would look like in terms of revenue recognition from these segments? I believe major part of qualifications as well as trials, I think we have already concluded.
Thank you, Harshit. There is three broad segments, 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 2027 completing this whole program, and then the revenues would start coming in from 2028 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 small part of the business. FY 2026 will be small. Sorry, FY 2027 will be small. FY 2028, it will start picking up. I earlier communicated it will peak in FY 2030. This is how we are expecting this. Aerospace and defense also will be slightly better in this year.
Again, the whole program will start kicking in 2028 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%-16% of Ceramics revenue growth in FY 2027 from 23%-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 this SOFC Ceramics.
Understood, sir. Sir, my second question is on Electro Minerals. 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. 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 is 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 will 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 Electro Minerals. Bauxite standalone revenues grew a massive 33% year-over-year. Could you provide some broad mix between pricing mix and volume for this particular quarter?
It is again, big trend is a big portion of it is volume. There is some amount of mix, which is also helping us because the treated product growth is on the higher side. That also will give the margin growth. It is more driven as a product mix rather than as a price realization. I would say sum and substance of this is volume-driven, very little or no price increase. Mix is contributing to this.
If there is not too much of a price increase in the Electro Minerals 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 Electro Minerals pricing for our Abrasives segment? That is my last question.
Very good question. I think of the cost of goods sold, somewhere between 80%-85% will be grains and other related stuff. That did not grow much, meaning we had a cost growth of, let's call it 3%-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 the brokered truce fell, 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, 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 question. Wish all the very best.
Thank you.
Thank you. We take the next question from the line of Amit Anwani from PL Capital. Please proceed.
Hi, sir. Thank you for taking my question. First question on VAW. Now it's almost one and a half 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 the sales was mostly localized. What's the utilization and update on sales? Any changes or any updates 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 won't change since then. You were asking about what is our view on this business. We have shared this in the earlier calls also when you asked a similar question last time. 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, and then see what happens to this.
Fortunately, these people with even a tough condition, 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, we need to kind of stay put and see what best we can do.
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 now 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 engineering 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 comparable guidance of 11%-12%, I just wanted to understand how much volumes growth we are factoring here, and as you highlighted about the cost push, would there be any further scope of price increase? I wanted to understand volume versus price, what you're looking for the full year in your guidance.
Right now, I think we are looking at 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 had on us. Every day it changes. When you 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, et cetera, 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.
Thank you. We take the next question from the line of Varun Jain from Dolat Capital. Please proceed.
Hi. Good morning, sir, m ost of my questions have been taken up. Just if we exclude the GBP 251 million gain, the consolidated abrasives EBIT margin is close to 2.5% versus the 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 it that way. I still hold what I said.
Sure, sir. Sir, of the INR 400 crore CapEx, any breakdown of how much is going where for 2027?
We gave a detailed listing last time in our earnings call, but I'll quickly cover that. It includes the expansion in advanced ceramics for power electronics, including substrate, metallized tubes, rings, brazed assemblies, expansion of brownfield alumina, addition of integrated furnace facility for thermal spray powders, zirconia furnace.
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 this is the broad guideline we can share.
No problem. Sir, has CUMI received the SCOMET 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, 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.
Okay, sir. Okay, got it.
Some of these are all NIJ Level III, Level IV. Similarly, in terms of the BIS threat Level IV and Level V. These are the basic standards that we meet, that your product should meet, and that is what we have basically tested ourselves in laboratories outside of India.
Just last one. On a consolidated basis, unallocated expenses rose to close to INR 190 million for the quarter. What is the quarterly when did we should incorporate? For this quarter, was there some spike, maybe some one-off or something?
I covered in my earlier remark about what is that we are covering it in unallocated. This quarter, INR 19 crore includes mainly attributable to the foreign exchange loss, whereas it was a gain in the last comparable period. That is the basic reason for that.
Okay, sir. Okay, got it. Thank you, and all the best.
Thank you.
Thank you. We'll take the next question from the line of Sajal Kapoor from Antifragile Thinking. Please proceed.
Yeah, thank you for the opportunity. I was 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. 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 these type of cycles within our own business itself. Even though it is called four businesses, 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 there fundamentally things are changing.
We take a call whether it is the right one to continue or not.
That's very helpful. 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 equipment. We have been manufacturing ceramics over 40 yars, 50 years, and we have gained many expertise as well as patents and know-hows in this field. We work through anchor customers to prove ourself and the product when they kind of go through a qualification, and they feel we have the capability, et cetera. 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 adjacency that we get into it.
Sure. Understood. Thank you so much for answering both questions. Thank you.
Thank you.
Thank you. Before we proceed, in order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant. We take the next question from the line of Akshay Thakur from Helios Capital. Please proceed.
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? How do you see the demand runway for this?
Yeah, 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.
Okay, 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 Electro Minerals, the application of this, can you quantify the same in which and how much, how is it going to help us?
Yeah. We acquired this niche company largely for the RBSIC factories. 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. 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.
Okay. Thank you, sir. One last question on my part, sir. With respect to CFRP composites, we are currently making that product 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 allocations.
Thank you so much. Thanks for answering my questions.
Thank you.
Thank you. We take the next question from the line of Kartik Kohli from Kotak Institutional Equities. Please proceed.
Yeah. 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 and should we be looking at this number because the standalone sales, if there's any interplay with inter-segmentals and the growth is lower, would be useful to get your comments on both these things, sir.
The inter-segmentals are always removed, Aditya, so that won't come into play. As far as the export saliency of this business, it definitely has gone up. What we used to be roughly in the range of about 20%, we moved to last year to 40%, and now we are in that trajectory at this point in time. Last year, 35%, and we are getting into 40% trajectory.
Okay. Just a related question over here. As we see through annual report, you talk about, or let's say we sense that in Europe, there is a move away from China and in Electro Minerals, 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, the question is not clear. Could you be please slow and repeat the question?
Sure. Am I audible to you right now?
Right now better.
Thanks. Thanks for the patience over here. What I was asking was a related question that in the EMD side and then 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 export 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. It goes through a qualification process, establishing ourself, so it takes time. Now with the coupled this opportunity definitely helps us and we are definitely making use of it. We are also working similar effort in U.S. as well as in Asia.
Thanks. The second question from my side would be on the semiconductor side of things. 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 tie-up Mersen, so 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?
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 worked on certain options, and then we 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 in 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 2028 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 to?
Right now, our focus is that we should be a raw material supplier, and so we stay focused on that.
Thank you, all the very best to you.
Thank you, Aditya.
Thank you. We take the next question from the line of Pravesh Kochar from FourLion Capital. Please proceed.
Hi. Thank you for taking my question. A quick one on the refractory segment. I think you mentioned there is some volatility in terms of dispatches, et cetera. 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.
No, 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. Always Q4, it's a higher quarter in refractory business. Whatever we said, communicated earlier in terms of our capacity expansion programs, very much on. We don't see any issues in that.
Understood. Thank you. All the best.
Thank you.
Thank you. We take the next question from the line of Akshay Thakur from Helios Capital. Please limit your questions to one per participant.
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, we are covering some of the leading auto players at this point in time and through the products that Morgan has got.
Okay, sir. Any specific product like the substrates or anything?
No, it's a thermal protection 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. Ladies and gentlemen, we take that as the last question for the day, and would now like to hand the conference over to the management for closing comments. Over to you, sir.
Thank you for all of your participation. I'd 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're slightly going it up at this point in time.
As we share more and probably in the next quarter, we'll have more clarity, and we'll share a better update at this point in time. That's a broad summary. I would like to leave it with you. Thank you.
Thank you. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.