Grindwell Norton (GWN IN) – Q4FY26 Result Update – Healthy Q4; C&P growth momentum key to watch – Upgrade to ‘Accumulate’

Grindwell Norton (GWN) delivered a healthy quarterly performance with revenue growth of 18.7% YoY to INR8.4bn, while EBITDA margin expanded by 155bps 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%, supported by healthy traction across industrial end-markets. The Abrasives segment also delivered healthy growth of 15.1% YoY however EBIT margin remain flattish YoY reflecting the lingering impact of Chinese dumping, slower exports and competitive intensity. While Digital Services’ business recorded topline growth with EBIT margin expanded by 142bps to 25.2%. Ongoing capacity expansion initiatives and improving export opportunities aided by lower US and FTAs likely to aid growth momentum however the impact of the inputs crisis amid geopolitical crisis on business activity and exports remains a key monitorable in the near term. We await further commentary from the management of GWN.The stock is trading at a P/E of 38.7x/33.8x on FY27/28E earnings. We revised our EPS estimates by +0.9%/+3.3% for FY27E/FY28E and upgrade our rating from ‘Hold’ to ‘Accumulate’ factoring in improvement in Ceramics and Plastics division while valuing the stock at a PE of 38x Mar’28E (38x Sep’27E earlier) arriving at a TP of INR1,887 (INR1,731 earlier).