Carborundum Universal Limited (NSE: CARBORUNIV) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
G. Chandramouli — Adviser, Investor Relations
Sridharan Rangarajan — Managing Director
Sushil Bendale — Chief Financial Officer
Analysts:
Bhoomika Nair — Analyst
Harshit Patel — Analyst
Amit Anwani — Analyst
Aditya Mongia — Analyst
Bhavin Vithlani — Analyst
Lakshminarayanan KG — Analyst
Mohit Pandey — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY ’25 Earnings Conference Call of Carborundum Universal Limited hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the 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 the star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Bhoomika Nair from DAM Capital Advisors. Thank you, and over to you, ma’am.
Bhoomika Nair — Analyst
Yeah. Good morning, everyone. A warm welcome to the Q3 FY ’25 earnings call of Carborundum Universal Limited.
We have the Management today being represented by Mr. Sridharan Rangarajan, Managing Director; Mr. Sushil Bendale, Chief Financial Officer; Mr.
G. Chandramouli, Adviser, Investor Relations; and Mr. Denesh Kumar, AGM Strategic Planning. At this point, I will hand over the floor to Mr. Rangarajan for his initial remarks, post which we will open up floor for Q&A. Thank you and over to you, sir.
G. Chandramouli — Adviser, Investor Relations
Good morning. I’m Chandramouli. Let us start the meeting with the disclaimer. During this call, we may make certain statements, which reflect our outlook for the future or which could be considered 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. These statement must be reviewed in conjunction with the risks that the company faces. Thank you.
Sridharan Rangarajan — Managing Director
Good morning to all of you and a warm welcome to our 3rd-quarter earnings call for the financial year FY ’25. I trust that you and your family members are safe and healthy. I’ll quickly cover an overview and then we will open up for question-and-answers. First, we’ll talk about the consolidated number. Consolidated Q3 sales was INR1,241 crores. This was a growth of 9.8% compared to Q3 FY ’24. This growth was contributed mainly by ceramics and electrominerals, whereas the was marginally lower.
Compared to Q2 FY ’25, which is a sequential quarter, 2.6%, we were higher. Ceramics electrominerals grew up and abrasive are slightly lower. Consolidated sales on YTD basis, which was at INR3,635 crores and shows a growth of 5.5% compared to the same period last year. This growth was contributed by Ceramics by 8.6%, Electrominerals 3% and abrasive by 4.1%.
I will cover the PBIT, but whatever I’m covering the PBIT, I will talk about PBIT before exceptional items, and I will cover in specific about the exceptional items little later. PBIT for Q3 FY ’25 was INR141 crores. This was lower by 10.8% over Q3 FY ’24. PBIT from Ceramics went up by 14% and Electrominerals 34%, the better. However, PBIT from abrasives were significantly lower. I will cover each of these business PBIT a little later. While some of these business PBIT was higher, there was a swing in unrelocable expenses, which resulted in overall PBIT coming down and Sushil will explain this separately.
Compared to Q2 FY ’25, our PBAT is lower by 3.8%. The segment grew up by 17%, whereas PBAT and ceramics were lower by 18% and 14% respectively. PBET margin percentage at consolidated level came down from 11.4% in Q3 FY ’25 from 14% in Q3 FY ’24 and 12.8% in Q2 FY ’25. PBAT on YTD basis was at INR444 crores compared to INR454 crores in the same-period last year. PBAT margin percentage on OETD basis decreased from 13.2% to 12.2%. Consolidated profit-after-tax and non-controlling interest for Q3 without exceptional item relating to VAW was INR11 crores against the same number of INR111 crores in Q3 FY ’24 and INR116 crores in Q2 FY ’25. I will cover this in detail. I think we feel operation wise is comparable performance and at expected level. Consolidated profit-after-tax and non-controlling interest for Q3 FY ’25 after the exceptional item was INR35 crores. Profit-after-tax on YTD basis was INR264 crores, gains INR326 crores in the same period last year.
Again, this is due to exceptional item. If we consider without these exceptional items, PAT and non-controlling in PAT and profit-after-tax and non-controlling interest was INR339 crores, which is a growth of 4%. So business-wise to this fine, there are exceptional items, which we will cover this. Now I’ll move to standalone. Standalone Q3 was INR728 crores with a growth of 15% compared to Q3 FY ’24. This has been the highest quarterly sales for CUMI. This growth was majorly contributed by ceramic segment growing at 25%, electrominerals growing at 22%, abrasive grew marginally by 1.1%. Compared to Q2 FY ’25, the sales in this quarter grew up by 3.2%. Ceramics grew up by 16.5%, electromineral was almost flat and abrasives degrew by 4.6%. On YTD basis, standalone sales were at INR2,097 crores with a growth of 8.2% compared to the same-period last year. This was contributed by growth in electro minerals at 8.6%, ceramics at 7.4% and abrasive at 5.4%. PBIT for Q3 FY ’25 was INR110 crores and is similar to Q3 FY ’24. You would note that some of the PBIT of the businesses was INR129 crores compared to INR114 crores in Q3 FY ’24. This was offset by higher unrelokable expense, resulting in flat PBIT. The growth in segment results were mainly from Ceramics and electrominerals where was lower by INR7 crores. Ceramics went up by INR17 crores and electro minerals by INR6 crores. Compared to Q2 FY ’25, PBAT in Q3 FY ’25 was lower by INR6 crores. On YTD basis, PBAT grew marginally by 0.4% to INR344 crores against INR343 crores in the same period last year. Profit-after-tax on YTD basis grew up by 1.6% to INR250 crores when compared to the same period of the last year.
So I’ll cover the segment performance now. We’ll start with abrasives. Consolidated Abrasives, sales for nine months in FY ’25 was INR1,621 crores, the growth of 4.1% when compared to the same period last year. Standalone business grew up by 5.4%, RHODIUS about 7%, AWUKO16% showed good growth compared to nine months in FY ’24, whereas the Sterling Abrasives and CUMI America had a negative growth. Q3 sales was at INR526 crores with a small de-growth of 0.4% compared to Q3 FY ’24 compared to Q2 FY ’23, sales were low by 3.1%, largely coming out-of-the lower sales in standalone and in RHODIUS. Standalone abrasive, YTD sales was at INR905 crores with a growth of 5.4% compared to the same period last year. The growth was majorly driven by industrial and retail segment, while there is a small degrowth in precision business. The growth on YTD basis was predominantly coming out of the volume.
In Q3 FY ’25, standalone abrassive sales grew up by 1.1% to INR294 crores compared to Q3 FY ’24. Industrial Precision segment registered growth while retail segment was marginally lower mainly on account of a small volume drop. In comparison to Q2 FY ’25, there was a degrowth of 4.6% mainly due to lower industrial demand. RHODIUS. RHODIUS on YTD basis achieved 49 million compared to 46 million during the same period last year. And this represents a 6% growth over the last year. This was mainly due to volume growth. For the quarter, the RHODIUS achieved 15.3 million, which is a 1% lower compared to Q3 FY ’24 and lower by 7.5% compared to Q2. And between Q2 and Q3, it is always to have the lower number of days due to Christmas holidays, etc. Generally, the seasonality will be like this.
On YTD basis, RHODIUS has incurred loss after tax of EUR0.9 million against a loss after tax of EUR2.1 million in the same period. So the losses have come down significantly. We expect a growth of 7% on full-year basis as against 9% what we communicated during the Q2 earnings call.
We expect a loss of INR1.9 million on a full-year basis against the breakeven we told in Q2 earnings call. The losses in Q2 losses in FY ’25 are expected to be higher by 0.38 million compared to FY ’24. This is mainly due to pricing pressure in the market, higher freight costs and imports and additional costs relating to contract workers. It is to be noted that this is after the PPA write-off of 2.8 million, meaning if you add the INR2.8 billion full-year on a full-year basis, it is making a profit. AWUKO. AWUKO achieved a sales of INR7.6 million on YTD basis. This is a growth of 15% compared to the same period last year. For the quarter, AWUKO delivered a sale of 2.3 million, which is 8% growth over the same-period last year. Sequentially grew by 3% compared to Q2 FY ’25. The losses before tax on YTD basis worth EUR3.7 million compared to EUR2.7 million in the same-period last year.
Excluding one-off income in FY ’24, has improved their performance operationally. During Q2 earnings call, we communicated AWUKO would increase their sales — yearly sales by EUR2 million and have an EBITDA loss of EUR4.5 million. At present, we feel that the sales will increase by EUR1.3 million instead of EUR2 million. The EBITDA loss will still be around EUR4.5 million. I will cover the PBIT performance of the business segment. Consolidated PBIT for abrasive on YTD basis was lower by 0.5% at INR118 crores as compared to that of the last year. There was a slight drop-in margin from 7.6% in nine months FY ’24 to 7.3% in nine months FY ’25. This was mainly due to standalone drop-in PBET margin decreasing from 16.4% to 16.1%. Consolidated PBET for Q3 FY ’25 was at INR28 crores with a degrowth of 43% compared to Q3 FY ’24. This was due to PBIT degrowth in standalone almost about INR7 crores, about INR4 crores and about INR9 crores. While compared to Q2 FY ’25, the PBIT was low by INR6 crores. This is mainly due to lower PB18 in Rhodes and standalone.
Now I’ll move to electrominerals. Consolidated sales for nine months in FY ’25 was INR1,199 crores, showing a growth of 3% compared to the same period last year. Standalone business grew up by 8.6%, 24% showed good growth compared to nine months of last year. VAW and local-currency delivered better performance, about 2% growth compared to the same-period last year. However, when it converted to Indian rupee, it is showing a degrowth of 2.5%. Q2 FY ’25 consolidated sales was INR416 crores with a growth of 12.8% compared to Q3 FY ’24. The growth was contributed by standalone and. In comparison to Q2 FY ’25, sales grew by 3.4%. Had a double-digit growth, standalone was flat and VAW had a small de-growth. Standalone aircra mineral standalone Q3 sales was at INR211 crores.
This is higher — highest quarterly sales for mineral business. It is a 22.4% growth compared to Q3 FY ’24. This growth was aided by volume increase, higher price realization and also because of higher export sales. Compared to Q2 FY ’25, sales in this quarter were marginally higher by 0.3%. This was again aided by price realization, a small volume drop. OETD sales was INR610 crores with a growth of 8.6% compared to the same period last year. This was on account of increase in volume and a higher price realization. The other feature of the growth is also higher exports. VAW, the operations are, you know doing well and we will cover in detail the issues that we face. Sales in local currency for Q3 FY ’25 grew by 6.4% compared to Q3 FY ’24 and grew by 6% compared to Q2 FY ’25. On YTD basis, they delivered a 2.2% growth. They delivered a loss after tax of 718 million in Q3 FY ’25, including one-time exceptional exceptions against the profit-after-tax off to build 392 million in Q3 FY ’24 and profit of INR466 million in Q2 FY ’25. If you exclude the exceptions, profit-after-tax for Q3 FY ’23 would have been 479 INR479 million comparable to the other quarters. Profit on YTD basis grew by INR35 million compared to INR1.23 billion during the same-period last year. If you exclude the exceptions, profit-after-tax on YTD basis for FY ’25 would have been INR1.23 billion. I will now cover in detail about the issues relating to VAW. As per the press release of United States Department of State dated 10th of January, a set of companies, which includes Works, our subsidy company has been designated as specially designated national block person is GN list. Part of the US Department’s Treasury’s Office of Foreign Asset Control of fact for operating or having operated in the manufacturing sector of Russian economy. So as a result of this, the assets held in US will be blocked. Transaction in US currency is not possible by EAW. Transaction involving US car with US is not possible. Transacting in euro currency is not possible by as bankers and financial initiatives not risk to risk themselves for a secondary sanction.
They made a detailed assessment of the situation with the background of the learning and consulting from various experts. Why used to export around 40% to 45 percentage of sales of these US dollar-denominated sales is about 12% and euro-denominated sales about 25%. What doesn’t have any customer in US going-forward, war will not be able to export in US dollar or in euro. War will be able to carry-out only domestic business. In the meantime, we have provided for receivables in US dollars and even keeping the deposits in dollars. This would result in 100% provisioning on carrying value of the foreign currency receivables and deposits in WAS books outside of the Group. This amounts to INR1.59 billion before-tax. Post-tax, it would be equivalent INR1.19 billion. This position is at vast level. Kimi has to pay to off. After netting off the payable, the impact before-tax is INR104 crores and post-tax and non-controlling interest impact would be about INR76 crores in Q4 FY ’24 BW made a sale of INR2.3 billion and a PAT of Ruble INR384 million. Q3 FY ’25 made a sales of Ruble INR2.6 billion and a PAT of INR479 million before exceptional item. So we are also considering this. It’s a changing day-by day depending on various outcomes, but we have considered a lower sales and a lower profit compared to Q4.
So I would say at this point, we have to learn this, but we are going every quarter at this point in time. So I’ll move to. During the first-nine months of FY ’25, zirconia in local-currency witnessed a sales growth of 19% compared to the same-period last year. The growth was majorly driven by growth in volumes. And for the quarter sales grew by 45% compared to Q3 FY ’24 and grew by 21% as compared to Q2 FY ’25. On YTD basis, first incurred a loss of INR10.8 crores as compared to the loss of INR10.7 crores in nine months FY ’24. During the Q2 earnings call, we communicated that cost loss would be in the range of INR16 crores to INR17 crores. And because of better profit in Q3, we feel the loss would come down and it would be in the range of about INR9 crores to INR10 crores. Now I’ll cover the PBET of this segment. Consolidated PBET for Q3 FY ’25 was INR67.5 crores. This was a growth of 34% compared to Q3 FY ’24. Standalone business, Zirconia VAW contributed to this growth in comparison to Q2 FY ’25. Sorry, in comparison to Q2 FY ’23, it was a growth of 17%, again mainly due to better performance in faster. Margin at consolidated level was 16.2% in Q3 FY ’25 compared to 13.7% in Q3 FY ’24 and 14.3% in Q2 FY ’25. On YTD basis, PBET was INR168 crores compared to PBAT of INR186 crores in the same-period last year. This resulted in margins decrease from 15% to 14%. In nine months — over for nine months period, the drop is largely on account of AW, standard from Indus, PBAT was similar to the last year. I’ll move to the ceramics section. Consolidated sales on basis was compared to INR795 crores in the same-period last year. This represents a growth of 8.6%. The growth is mainly driven by QUMI India. Q3 FY ’25 consolidated sales was at INR315 crores compared to INR243 crores in Q3 FY ’24. The growth was contributed majorly by Qumi India. Compared to Q2 FY ’25, consolidated sales grew by 12%, standalone business and VAW showed also a decent growth. Standalone ceramics, standalone ceramics Q3 sales was INR265 crores with a growth of 24% compared to three FY ’24. This growth was aided mainly by volume increase offset by small impact due to lower-price realization, mainly rising our factories. Compared to Q2 FY ’25, sales in this quarter grew by 16.5%.
The growth was majorly aided by volume increase. Prices were impacted in monolithic segment of the refractory business. Sales were at INR710 crores is higher by 7.4% compared to the same-period last year. Fired and mono refractories metalized engineered ceramics business standalone group well and compared to the same-period last year, sales were lower in wire and corrosion resistance business. I’ll cover now the PBET of this segment. Consolidated PBAT for Q3 FY ’25 was at INR68 crores. This was a growth of 14% compared to Q3 FY ’24. This was majorly contributed PPAT in standalone by 34% in comparison to Q2 FY ’25. There was a degrowth of 14%. Standalone PBAT grew by 9%. There was a decrease in PBAT in overseas subsidiaries, PAT, which is basically Australia and America, PBA the margin in Q3 FY ’25 was at 21.8% compared to 24.7% in Q3 FY ’24 and 28.5% in Q2 FY ’25. Consolidated PBAT on YTD basis was at INR213 crores compared to INR215 crores same-period last year. This resulted in margin decrease from 27% to 24.6% for the nine months period. This was mainly due to underperformance in Australia and America. I would request now, Sushil to cover the margin percentage, our debt, CapEx, cash-flow and return on capital employed. Thank you.
Sushil Bendale — Chief Financial Officer
Thank you. Let’s speak about the PDIT margin at a consolidated level. On a YTD basis, the consolidated PDIT margin was at 12.2% compared to 13.2% in the same-period last year. For the quarter, consolidated PBIT margin was at 11.3% compared to 14% in Q3 FY ’24 and 12.8% in Q2 ’25. Now the standalone — standalone PBIT margin on a YTD basis was at 16.4% compared to 17.7% during the same-period last year. For the quarter, standalone PBIT margin was at 15% compared to 17.4% in Q3 ’24 and 16.4% in Q2 ’25. Abrasives, the consolidated PBIT margins of on a YTD basis decreased from 7.6% to 7.3% and standalone margins — margins were at 16.1% with a dip of 30 basis-points as compared to last year. Reduced their losses and has improved their performance operationally. For the quarter, consolidated margins declined from 9.5% in Q3 ’24 to 5.4% in Q3 FY ’25. This was due to decline in standalone margins from 17.2% to 14.6% and the margins dropped by 95 basis-points compared to Q2 ’25. Electrominerals, the consolidated PBIT margins of electrominerals on a YTD basis declined from 16% to 14% and the standalone PBIT margin of nine months was at 9.3% compared to 10.5% in FY ’24 nine months. The drop is mainly due to higher input costs and pricing pressures that we see in the market. For the quarter, consolidated electro minerals margins improved from 13.7% in Q3 FY ’24 to 16.2% in Q3 ’25. Standalone electrominerals PDIT margins increased from 7.8% in Q3 of FY ’24 to 9.1% in Q3 ’25. The consolidated margins of electrominerals improved by 192 basis-points compared to Q2 ’25, which was contributed by profits delivered by in Q3 ’25 compared to losses in the previous quarter.
The standalone margin percent in Q3 ’25 decreased by 113 basis-points compared to Q2 ’25. And now the Ceramics business, consolidated Ceramics margins on YTD basis decreased from 27% to 24.6%. The standalone Ceramix PBIT margins declined by 50 basis-points to 25.1%. Profits from Qumi Australia and Qumi America were slightly lower compared to last year. For the quarter, consolidated ceramic margins declined from 24.7% in Q3 ’24 to 21.8% in Q3 of FY ’25. This is mainly attributable to QUMI Australia and Qumi America.
In comparison to Q2 ’25, the consolidated Ceramics margins decreased from 28.5% to 21.8% in Q3 of ’25. The standalone margins in Q3 ’25 decreased by 186 basis-points compared to Q2 ’25. Now about the debt position. There was no debt in our standalone books and total debt at a consolidated basis was at INR109 crores at the end of Q3 FY ’25 compared to INR103 crores at the end of Q2 ’25 and INR119 crores at the end of Q3 ’24. The debt-to-equity ratio was at 0.03 at a consolidated level. On a YTD basis, the capex, our investment was about INR202 crores. ROCE, on the YTD basis, our return on capital employed at a consolidated level is 17% compared to 18.3% during the same-period last year.
And at a standalone level, it is at 18.2% compared to 20.5% last year. For consolidated business, ROCE in nine months for abrasives declined from 11.4% to 11.1%, Ceramix declined from 46.5% to 38.2% and electrominerals from 27.1% to 24.6%. For standalone businesses, the ROCE on YTD basis for abrasives has marginally decreased from 42.9% to 38 and Ceramix has declined from 51.4% to 46.6%. Has decreased from 27 to 20.1%. Now the unallocable expenses at a standalone level. At the standalone level, the unallocable expense in Q3 ’25 was at INR19.8 crores compared to Q3 ’24. This was higher by INR16 crores, primarily due to lower dividend, higher project-related costs, higher employee costs on account of new headcount additions, ESOP benefits and leave benefit valuations. Compared to Q2 ’25, it was marginally higher by INR2 crores due to higher dividend receipts in Q2 ’25.
On the YTD basis, unallocable — unallocable expense was INR37 crores compared to YTD Q3 2024 unallocable expense was higher by INR10 crores, primarily due to lower dividend, higher project-related costs, higher employee costs on account of new headcount addition and ESOP benefits. At a consolidated level, unallocable expense at the consolidated level in Q3 was INR22 crores. Compared to Q3 ’24, unallocable expense was higher by INR24 crores, primarily due to higher exchange loss in Kumi International on translation of certain closing balances, higher project-related costs, higher employee cost on account of new headcount addition, ESOPs and leave benefit valuations. Compared to Q2 ’25, the unallocable expense increased by INR11 crores, primarily due to exchange loss in Kumi International on account of translation on certain balances versus exchange gain in Q2 of ’25. On a YTD basis, the unallocable expense at a consolidated level was INR45.4 crores at almost at a similar level of YTD Q3 ’24.
Now I request Mr. Sridharan to talk about the future outlook.
Sridharan Rangarajan — Managing Director
Right. So I’ll comment about what we talked about in Q2 earnings call and what we are now looking at. So we communicated full-year consolidated sales to be 9% to 11% growth. We said about INR5,100 crores to INR5,200 crores. We expect a shortfall of INR2500 crores. So the overall growth will be accordingly adjusted. Consolidated abrasives, we expect a growth of 5% against 10% what we communicated earlier. The shortfall is mainly coming from. We communicated growth in the last call, 2 million, whereas now they are talking about 1.3 million. The braces in India growth would be in the range of 6% to 7% against 9% to 11% what was communicated earlier. Is doing well. We communicated earlier the growth of 9% to 10%, but now we are revising, we feel it could be about 6% to 7%. We communicated about sales growth of 12% to 14% consolidated ceramic segment.
We expect it to be 10% to 12%. For industrial ceramics business in India, we communicated growth projection would be 12% because of some shortfall in engineer and ceramics segment. It would be 10% on year-on-year basis. Refractory, we expect 8% to 9% growth over the last year against 12% to 13% we communicated earlier. We communicated about sales growth of 5% to 6% in consolidated terminal business. We expect some shortfall from VAW what we have planned. This will lead to flat or marginal improvement over the last year. Growth from standalone business is slightly better than what we communicated earlier, about 10% growth. The PBAT performance, we communicate the consolidated PBAT would be 12.7%, 12.8%. We expect a drop of by about 100 to 120 bps. And we said that consolidated abrasive and ceramic margin will be similar to that of FY ’24. At present, we expect to draw by about 150 basis-points. In our last call, we said that consolidated electro mineral margin will be in the range of 13.5% to 14%. We expect the margin decrease by 100 bps. For CapEx side, we said that we would spend about INR350 crores. So far, we spent about INR202 crores in nine months. We feel it would be to — we should be spending about INR300 crores. Overall, we expect the top-line to be INR4,800 crores to INR4,000 crores.
We expect PAT to be around INR450 crores without considering the exception effect. We would be spending about INR300 crores of capex. We’ll be continuing to be debt-free while delivering the current business. We have also prepared a good strategic plan for the future. We will share more in the near-future. So with this, I will conclude the opening remarks and open up for the Q&A. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question is from the line of Harshit Patel from Equirus Securities. Please go ahead.
Harshit Patel
Hi, sir. Thank you very much for the opportunity. Sir, my first question is on VAW. As you mentioned, we won’t be able to transact both in US dollar as well as in euro. So is there a — is there that much of an appetite in the local Russian market that we will be able to absorb those lost sales or what exactly could be impact of these measures, both in the near-term as well as how do we plan to mitigate this over a medium-to-long term?
Sridharan Rangarajan
So, Harshit, I think we said that we will not be able to sell and we will not be able to compensate. We will only be selling what we were selling domestically. And we are just looking one quarter at a time to see how this whole thing develops. So that is why we said that, you know as far as the next quarter, we have made this adjustment. That is why we are bringing down the top-line also in our projection. And so that is what we are looking at this stage. But we feel that given what they have been doing in domestic, they should be able to do — continue to do the same.
Harshit Patel
Understood. Just a follow-up to that. You have also mentioned that the cash was around INR123 crores, which is not available for use by any entities within the Group due to the temporary repatriation restrictions. So is this the entire cash balance of VAW or just one portion of it? And why can’t we repatriate that to India? I mean, we can at least transact between ruble and INR, right? There shouldn’t be any restrictions on that.
Sridharan Rangarajan
Yeah. So is just an accounting technical term is being used. This is this represents the cash-in VAW and typically the cash repatriation means you know that rupee ruble trade is possible only to the extent of the trade-related transaction. We don’t have any ownership of CUMI India doesn’t own VAW directly, it is owned in Cyprus and it has to come through Cyprus and that is where we feel that at this point in time it is not and hence it is mentioned so.
Harshit Patel
Understood, sir. Perfect. Sir, my second question is on our Ceramic segment. While the standalone business has done exceedingly well, I mean, the growth has been more than 20% after quite a long period of time. However, the margins seem to be weak. Our understanding was that when the engineered ceramics business will revive, there would be a decent margin expansion on that. First, that is not visible. And secondly, even the Ceramics margins at the subsidiary level seems to be very weak. So is there any one-off impact of the consolidation of that American entity, which is silicon carbide products that we have consolidated for the two months of this particular quarter. So what was the revenue and EBIT contribution from that acquired company in this particular quarter?
Sridharan Rangarajan
So to start with, I think there are some one-off issues in Australia and America. Australia is largely — there are provisions in terms of the inventory and in terms of the receivables. And that is the broad reason, plus there is also product mix change in terms of the lower project-based orders, that is the reason for that. As far as America is also concerned is that we used to ship them including the freight, but now we have changed the terms, the freight is absorbed by the — our American entity. And hence there is a drop in the margin from their level. So that is the — I would say, these are not relating to operations side of the business more at this point in time, one-off, I would say.
Now as far as the margins that you are looking at in terms of the PBIT, you know, we had a standalone ceramics margin of 25.3% of Q3 FY ’25 versus the last year at the same period, about 23.7 percentage. And sequentially, we have — we were at 23.8% and moved up to 25.3%, showing improvement in margin as you observe that the volume is going, mix is better and the margin percentage is also better.
Harshit Patel
Just on that silicon carbide INC.
Sridharan Rangarajan
So that company is fine. We will share more details at this. It’s a very small English company. They are in-line with our expectations.
Harshit Patel
Perfect. Sir, just a small one question if I can squeeze in. The standalone EMD margin had benefited from the higher fused alumina prices in the last quarter, that is second quarter of FY ’25. So how was that particular situation in 3Q FY ’25 because we see a sequential margin drop in this particular aspect.
Sridharan Rangarajan
So I think so to start with, if you look at always EMD, the Q3 PBAT margins will be lower than the Q2. It’s a seasonality effect. You can check many quarters and you will see this trend, right? Second is that I think there is a cost pressure, definitely alumina price increase versus our ability to put on the price is a continuing process plus the competition from China is also a factor that puts us also pressure in terms of putting up the price. So that is what I would look at it largely and that is where you see this margin about 8.2% compared to last year’s same-period about — sorry, 9.1% compared to last year’s same-period at 7.8%. So that’s a broad thing. The drop from 10.3% to 9.1 is more a seasonality linked basis.
Harshit Patel
Understood, sir. Those were my questions. Thank you very much and I’ll get back-in the question.
Sridharan Rangarajan
Okay. Thank you. Thank you, Harshit.
Operator
Thank you. Participants who wish to ask a question may press star and one. Next question is from the line of Amit Anwani from PL Capital. Please go-ahead.
Amit Anwani
Hi, sir. Thanks for taking my question. Our first question is on abrasives. You mentioned that the guidance has been lower to 6% to 7% and also for consol abbressive rodius has been lower to 6% to 7%.
So domestically, you have been highlighting in the past that standard abrasives have been facing Chinese impact. Wanted to understand more color post the tariff wars and slowdown in China continues, what is the outlook in domestic market for abrasives? Will it be 6% to 7% for the longer period of time or there is some improvement effect in? And also what is the status on RHODIUS and AWUKO as well with respect to sales, are we sticking to what we guided because in three months’ time, we changed the guidance drastically. So just wanted to understand more details on abrasives side and subsidiaries.
Sridharan Rangarajan
See abrasive demand is largely I would say, at this point in time holding on. Definitely the market industrial activity is showing pressure in terms of, you know the demand that is for there. And also at the same time, there is a increased infrastructure spend the government also has announced so should be able to again put up some demand for the braces one. So it is going to be, you know, a period where we need to watch in terms of how the demand is going to play-out.
So as far as the tariff type of question, I’m not going to do crystal ball gasing now, so let us see how this is going to span out and then we will take it as it comes because it’s going to be a tough one to do this. And in terms of the top-line, I think so as I said that, I think it’s, we have just revised from EUR2 million to EUR1.3 million. That is the only division that we are doing. But RHODIUS is you know a large portion of the RHODIUS is a challenge of cost pressure rather than the top-line and I would say that in terms of the top-line, we are still feeling that what we said earlier versus now is still holding. There could be large issues in terms of the pricing pressure and some logistics costs going up and employment of contract workforce. A combination of this is what is pulling the margin down. But I think they should be in a position to address. We will share more color as we meet in the month of May.
Amit Anwani
So again on the VAW, you said 12% of sales is happening USD, I think that is impacted. And I recollect, I think we were doing a lot of sales in Europe, which is I think 60%, 40%, 60% was Russia, 40% on Europe. So any color, so shall we assume that a large part of the sales will be impacted or you’ll be diverting more towards Russian markets or some other geographies? If you could give more colors on the business aspect of EAW now, how should we read that.
Sridharan Rangarajan
So I told Amit in my opening remark, 60% is domestic sale and 40% is export. And of that 12% is dollar denominator and 25% is zero denominator. We feel that euro on dollar, they will not be able to export and the focus of the company would be more on domestic side of the business, which is what they used to do, 60 percentage of the business. Okay. And we are looking now quarter-by-quarter. For this quarter, whatever we are feeling for the remaining kind of two months, we have made this adjustment. We have worked on that. That is why we are sharing this adjustment. Beyond that, we’ll have to wait and see as things develop. There are many developments you know happening every day. There is lot of development. So let’s wait-and-see without making a broad-based guess for the future.
Amit Anwani
Sure, sir. Thank you. Thanks so much.
Sridharan Rangarajan
Thank you.
Operator
The next question is from the line of Aditya Mongia from Kotak Securities. Please go ahead.
Aditya Mongia
Yeah, thank you for the opportunity. Again, two questions on VAW. Firstly, when you say that in the euro-denominated businesses will also kind of go down and it will only be a domestic business. Is this coming in from the customers or is this a thought process that you have at this point of time?
Sridharan Rangarajan
So it’s largely coming from the fact that the bankers are not in a position to transact in dollar or in euro. So that is the basic problem that they are facing.
Aditya Mongia
Okay, understood. And let’s assume as you were saying the revenue levels fall to 60% of where things are today in VAW. Could you give us a sense of how does it impact the profitability in local currency because there will be fixed costs that have to be taken into account? And then secondly, from a repatriation perspective, what are the means that we have of extracting the incremental profits and the cash from there?
Sridharan Rangarajan
Sorry, you are — could you repeat the second portion of the question, repatriation?
Aditya Mongia
So of whatever incremental money we make in VAW, yeah. I am not clear whether we can kind of repatriate them or not because of the comment that was made on the call on cash. Just trying to get a sense of both assets, a, what will be the profitability and B, what will be the means to kind of make it come to us incremental profit that is.
Sridharan Rangarajan
Sure. So Aditya, first of all, as I said earlier is, we are taking 1/4 at a time, you know, the model of the business will be domestic business and obviously, the business have to be sized for that, which means costs have to reflect that kind of a volume of the business, right? So all those aspects needs to be looked into that team is definitely looking all these aspects of it. As we go on meet in the month of May, we will have better picture emerging and we will share what we are looking at as a, you know going forward.
But as I said, you know, domestic business is possible, domestic space is there. They have been doing this for the last three years, as you know that as they change their product mix and positioning of the product. And we feel that should be, you know, in good stead for them once they have resized their operation accordingly. And we have considered when we talked about this year, the impact of that for the, let’s say, the three months of Q4 is part of that consideration. But beyond which I would like to wait to see how this is going to play out. If we feel that I think there should be some you know, better picture should emerge.
Aditya Mongia
Again, just to make clarity, is repatriation a problem or not? A simple question on incremental profits.
Sridharan Rangarajan
So repatriation of dividend is a challenge because you cannot using dollar or euro. So that is a issue and the money will probably be — they have to make use of it for their own investment purpose and we will have to wait and see once better days comes.
Aditya Mongia
Sure. And if INR100 if the volumes or revenues of this company, how much are being consumed internally, let’s say, coming to India and then being used up? Is that any meaningful proportion?
Sridharan Rangarajan
Yeah. Question is not clear. Could you repeat the question?
Aditya Mongia
Are there any sales that happen from VAW to standalone entity? I’m just trying to get a development from an internal perspective.
Sridharan Rangarajan
No, we have very, very little sales to CUMI India and has no impact to CUMI India business and there will not be any transaction between CUMI India and VAW.
Aditya Mongia
Noted. I have more question, but I’ll get back into the queue. Thank you.
Operator
Thank you. Thank you. The next question is from the line of Bhavin from SBI Funds. Please go ahead.
Bhavin Vithlani
Yeah. Good afternoon. The question again is on a VAW. Now that there is a restriction, is there a thought of kind of because the acquisition was made as a with a thought process of security of raw-material. Now that is not possible is there a thought of kind of divesting this business completely as reparitation also is getting challenged?
Sridharan Rangarajan
Yeah, I think, it’s a good question. From our point-of-view, we need to allow some time to understand what this means to us, right? And we don’t want to extend our thinking beyond the current management of what we are doing. I think these things can change. You know this is a geopolitical issue, so we need to wait-and-see. So we’ll have to give some time to see how this development will turn. So I will focus more on you know 1/4 at a time and see how do we take this forward?
Bhavin Vithlani
Sure. Could you give us an update on the projects and within the Ceramics division, the couple of expansions which were underway in terms of armored or semiconductor one and also we, couple of quarters back we had issues with respect to the new energy hydrogen SOFC related.
Where are we in that? Have we seen a ramp-up on that front?
Sridharan Rangarajan
Okay. So as far as the projects are concerned, they are very much on-track and we are tracking to the time as well as to the cost. We feel that it should progress as per our timeline. No challenges, no issues. I’m not clear about your second comment in terms of the — we have not shared any challenges relating to hydrogen related stuff. I’m not sure where you are coming from. Okay. So we had seen drop-in sales because the customer — okay. So that is not hydrogen related, probably let me come in. It is a solid oxide fuel-cell manufacturer and they are not into hydrogen business. So they would basically generate electricity out of that and that is what is their core business. That business is back, I think as we communicated, this is from Q1, that is calendar year Q1 onwards FY ’25, which is what like Jan to March, what currently we are running, which is Q4 for us, their order takes are fine and they are very much in-line with the trend what they have communicated to us
Bhavin Vithlani
Okay. Just a couple of follow-ups on the two expansion projects, especially on the armored side. If you could give us like do we — I mean, are the customers for which we are kind of building — are their projects also in-line because we would be a supplier or Tier-1, Tier-2 suppliers. So if you can give some update on that front on both the projects, while we may be ready, the customers also should be correspondingly ready.
Sridharan Rangarajan
I think the customers are ready and they are definitely very much part of this progress and they have been updated, they are also keep updating us and it is progressing as expected.
Bhavin Vithlani
So ramp-up would be pretty quickly as soon as the VC expansion getting commissioned. Would that be a fair assumption?
Sridharan Rangarajan
Yeah. So first let’s start the project, kick-start the production start as in our sale and we will share more details as we progress.
Bhavin Vithlani
Great. Yeah. Those were my questions. Thank you so much.
Sridharan Rangarajan
Right. Thank you, Bhavin.
Operator
Thank you. The next question is from the line of Lakshminarayanan from Tunga Investments. Please go ahead.
Lakshminarayanan KG
I have two questions. First is that if I look at India made and India sold, what has been the last nine months sales growth made in India and sold-in India?
Sridharan Rangarajan
It’s roughly about around 8%, you know, I don’t have a precise number, but indicatively what abrasives, refractories and some of the electro mineral sales put together, I should look at it that way.
Lakshminarayanan KG
And if you look at this segment, what has negatively surprised you in the last three months or maybe six months?
Sridharan Rangarajan
Negatively surprised is definitely Volzhsky Abrasive Works
Lakshminarayanan KG
No, I am just looking at the India made, India sold. How does that actually stand out?
Sridharan Rangarajan
I don’t think there is any major surprise, I would say, either positive or negative. We feel that it is continuing to be the same and we expect probably the momentum might pick-up because of this renewed commitment from the government of India in terms of their capex programs, infrastructure spend, et-cetera, should probably also more money put in the people, the demand driving could also happen. And so it should probably looked at as more positive.
Lakshminarayanan KG
And in this business, what is the mix of direct OE sales versus distribution and what has been the — which has actually grown faster between these two segments. India made India sold.
Sridharan Rangarajan
I think you know so we have the entire electrominerals refractories or business-to-business and as far as the abrasive is where the dependence on the distributor is high. So that I would say for example is the biggest distributors-led business, the rest is all-in business-to-business led growth and overall, we are looking at more similar experience. Maybe in the distributor side, there are, you know pressures in terms of their collections and probably some inventory piling up, all those things up, we are looking at. Other than that, I don’t think any significant observation, which I can share.
Lakshminarayanan KG
Got it. And with my second part of the question is, in terms of India made and exports, what has been the growth for the last nine months? And how do you expect this year to conclude for the export business from India.
Sridharan Rangarajan
Export has significantly grown than the domestic growth and I will feel that should continue the same way that I don’t see
Lakshminarayanan KG
You have a number, sir? You have a number in terms of how much is the India made and exported from India. For the last nine months, what is the — what is the revenues and then how it has grown over the last similar period last year.
Sridharan Rangarajan
Yeah, we have grown almost about, say, 18% to 20% in the export side of the business.
Lakshminarayanan KG
And how much that has come is the total business if you look at India, India made
Sridharan Rangarajan
We will share more details to you, Lakshminarayanan. Yes.
Lakshminarayanan KG
Okay. Thanks. Thank you, sir. That’s all my questions.
Operator
Thank you. The next question is from the line of Mohit Pandey from Macquarie. Please go-ahead.
Mohit Pandey
Yeah, good afternoon, sir. Sir, my first question — yeah. My first question is on Ceramics subsidiaries. Sir, if you could please provide more color on the challenges that were faced in this quarter in the subsidiaries, especially America that impacted the margin because historically as per my understanding, this has been very profitable for a subsidiary. So that would be very helpful.
Sridharan Rangarajan
Thank you. Yeah, I think Mohit, we covered this largely two businesses, Australia and Americas where we had these some of the one-offs. There is a provisioning on the inventory receivable plus big business mix change in Australia, logistics costs going up in America and these are the broad drivers and probably some higher in employee benefits because of the law change in Australia. Other than that, those are all normal. And we still feel if you exclude them, their business performance is good and these we feel that these are one-offs.
Mohit Pandey
Okay, sir. So sir, provisioning, etc., you think is more or less done in this quarter for inventory and receivables?
Sridharan Rangarajan
Yes, yes. Yes. They are done, yes.
Mohit Pandey
Yes. Okay, sir. Sir, secondly, on Rhodius margins. So you indicated the cost pressures that is hurting profitability, but you also said demand seems to be holding fine. So going-forward, do you see possibility of passing on the cost pressures? If you could also give more color on the nature of these cost pressures, that would be really helpful.
Sridharan Rangarajan
Okay. So I said that there is a price pressure, which is basically, you know the expectation of the you know from the customer is a you know price drop and there is also at the same time, there is also a cost pressure. That is the combination of it and I don’t think cost is a significant portion. It’s mainly a — you know, the market price is where the challenge comes.
Mohit Pandey
Okay, sir. Understood. And sir, last question on VAW. So fixed-cost notwithstanding, is the domestic business inherently more profitable on the gross margins compared to whatever exports have been done so-far from BAW.
Sridharan Rangarajan
Yeah. So I think we feel, as I said in my earlier response also is that domestic business, they should be able to do fine and they are readjusting and repositioning themselves as far as the fully focused domestic business model is concerned and we feel that should be helpful for them and they should be in a position to manage it.
Mohit Pandey
Okay. And sir, last question on the expenses. So any outlook if you could provide here. So these project cost that were mentioned, these are linked to the newer the R&D work that you’re undertaking, is that a fair understanding? So, this can remain elevated? Or how should we think about it?
Sridharan Rangarajan
See, this could change. Last year, we spent about, say, INR58 crores of total unallocable costs. We should expect should be in the range of about around INR60 crores plus. So, that’s the broad expectation one can have
Mohit Pandey
Okay, sir. And so last question was on the longer-term plan that you briefly alluded to. So any timelines you have in mind around when you are looking to announce that or that would be my last question. Thank you.
Sridharan Rangarajan
Yeah, I think we will share more details when we meet again in the month of May.
Mohit Pandey
Okay, sir. That’s it from my side. Thank you so much.
Sridharan Rangarajan
Thank you. Okay. Thank you. Ladies and gentlemen, this will be our last question. It’s from the line of Bhoomika Nair from DAM Capital. Please go-ahead.
Bhoomika Nair
Yes, sir. Just wanted to ask on the business, in terms of the end-market, we saw precision was quite impacted, but now there seems to be some improvement.
So if you can talk about the outlook for industrial, retail and precision and because this quarter was fairly muted in standalone from a growth perspective, how do we see the growth coming back and also some comment on the Chinese competition?
Sridharan Rangarajan
So I think, I talked about the overall aggressive business. We feel that it will continue to be in that range, 8% to 10% growth. Industrial is doing fine, retail is doing fine. Our precision is largely in terms of the dependence on how the industrial outlook is there. So there’s to some extent, it is linked to, I would say, like say bearings and some of the high-end auto components in business turnaround. So that should also be doing fine is my own guess. So overall, I should say that they should be able to travel around 7% to 8% type of a growth
Bhoomika Nair
Sure. Sir, on the other side, in terms of dynamics, you talked about the one-offs that we saw in Australia and in Americas. When you mean one-offs, does that mean that this will not recur or going-forward and it will normalize at the business level margins as we move ahead into the quarter or the next year?
Sridharan Rangarajan
Correct, correct. Correct. That’s correct.
Bhoomika Nair
Okay. Okay. And lastly on, you know, with exports being a challenge, which is 40% and as the revenue scale kind of comes down, will there be a hit on the profitability because of the fixed-cost and lower revenues?
Sridharan Rangarajan
So I think as I said, the business is relooking at the model and repositioning themselves the cost also accordingly because you cannot afford to run the business at the same level with 100% business possible, whereas you are only doing domestic. So that repositioning is parallelly happening and they have to resize this operation accordingly. So that should be — they are very much ever and they are definitely on-the-job to do that.
Bhoomika Nair
So how long do you think it will take to resize the business and cost structure accordingly? Will it take like a three, six months or longer timeframe.
Sridharan Rangarajan
So my one guess is that they should be able to reposition this in this quarter.
Bhoomika Nair
Okay. Okay. Got it, sir. This was my questions. Thank you very much for giving us an opportunity to host the call and also the participants for being there. Thank you very much, sir, and wish you all the very best.
Sridharan Rangarajan
Thank you. Thank you. Thank you. Thank you so much. And I’d just like to say that you know if you exclude the exceptions arising out-of-the Russia challenge, we feel that the business has performed operation wise quite decent and I think that should continue is what we feel. As far as Russia is concerned, we are keenly watching and see how we need to respond to each of the situation.
And as I said, we will take 1/4 at a time and see how do we you know, tread this part it’s a geopolitical issue and we need to see how this will evolve you know, and I think you are all keenly watching you know the news so we must be also be tracking this parallel. So I feel that other than this, the business is doing fine. The balance sheet in good stead we feel that we have done a fair bit of work-in terms of the future in terms of how a long-term strategy can be looked at. And I think we will share a portion of that when we come and meet in the month of May. So thank you for all your patient hearing and asking the right questions and wish you all the best.
Operator
Thank you. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.