Grindwell Norton: Target of Rs 1887 Set by Prabhudas Lilladher

Grindwell Norton Delivers Strong Quarterly Performance

Grindwell Norton (GWN) has reported a healthy quarterly performance, with revenue growth of 18.7% year-over-year (YoY) to INR8.4bn. The company's EBITDA margin expanded by 155 basis points (bps) YoY to 19.5%, driven by operating leverage despite lower gross margins.

The Ceramics & Plastics (C&P) segment remained the key growth driver, reporting revenue growth of 23.3% YoY along with 246bps YoY EBIT margin expansion to 19.7%. This growth was supported by healthy traction across industrial end-markets. In contrast, the Abrasives segment delivered healthy growth of 15.1% YoY, but EBIT margin remained flat YoY, reflecting the lingering impact of Chinese dumping, slower exports, and competitive intensity. The Digital Services business recorded topline growth, with EBIT margin expanding by 142bps to 25.2%.

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Ongoing capacity expansion initiatives and improving export opportunities, aided by lower US and FTAs, are likely to aid growth momentum. However, the impact of the inputs crisis amid geopolitical tensions on business activity and exports remains a key monitorable in the near term.

We have revised our earnings per share (EPS) estimates by +0.9%/+3.3% for FY27E/FY28E and have upgraded our rating from 'Hold' to 'Accumulate'. This revision is factoring in the improvement in the Ceramics and Plastics division, while valuing the stock at a PE of 38x Mar'28E (38x Sep'27E earlier), arriving at a target price of INR1,887 (INR1,731 earlier).