The businesses of the Saint-Gobain Group in India are housed in two large entities, Grindwell Norton Limited (GNO), a publicly traded company, and Saint-Gobain India Pvt Ltd (SGI). Grindwell Norton is a part of the “high performance materials” division, which is a part of the “innovative materials sector” of the group. Listed on both the Bombay and National Stock Exchanges, the company pioneered the manufacture of grinding wheels in India in 1941. Saint-Gobain currently holds 51.66% of the equity capital of GNO. Today, GNO’s businesses include: abrasives, silicon carbide, high performance refractories and performance plastics. GNO’s subsidiary, Saint-Gobain Ceramic Materials Bhutan, in which it holds 70% of the present equity, manufactures silicon carbide. GNO’s abrasives business, markets and manufactures a full range of bonded and coated abrasives, thin wheels and super abrasives at its plants near Mumbai, Bangalore, Nagpur and Himachal Pradesh. The high performance refractories business offers complete solutions with expertise in design, engineering and manufacturing refractory systems for many applications. The plants are located in Bangalore and Halol (Gujarat). The silicon carbide business manufactures silicon carbide crude and grains at Tirupati (Andhra Pradesh) and near Phuentsholing (Bhutan), and is a major supplier to all leading refractory, metallurgy and abrasives manufacturers in India. ADFORS is a world leader in glass fibre technical fabrics for applications in construction and industry. Its products include glass fibre mesh for exterior wall insulation, wall coverings, joint tapes, glass mats for thermal insulation and the production of asphalt concrete overlays, as well as insect screens and paving reinforcement grids. The business has a manufacturing facility in Bangalore. Looking ahead from the medium to long term perspective, the outlook for the industry and Grindwell Norton, in particular, is quite positive. The company’s businesses are expected to benefit from growth in the industrial economy and implementation of the Goods and Services Act. The management of the company is looking to focus on new products, new markets and exports in the future to sustain a healthy growth path. The financial outlook of the company is quite good, with the EPS for FY2018 and FY2019 expected to be Rs 13.30 and Rs 14.90, respectively. At the current market price of Rs 515, the stock price to earnings ratio for FY2018 stands at 39. Hence, the Grindwell Norton stock can climb 20% in the next 12 months from the present levels and is a good portfolio buy.

Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.

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