Archive · 5 Oct 2026
China’s Export Rebate Removal Puts Indian Abrasive Stocks in Focus
China used to give exporters of some abrasives and ceramics a tax rebate.
It ended that support in April 2026, which could make Chinese products less price-competitive.
That may give Indian companies Carborundum Universal, Wendt India and Grindwell Norton some help.
The companies are also making more specialised products, such as advanced ceramics and super abrasives.
These products are used in industries including semiconductors, aerospace and electric vehicles.
The article reports growth in several of these businesses.
But the stocks of some companies are already valued much higher than their past averages.
Investors still need to see whether the companies can grow enough to support those prices.
China withdrew its 13% export VAT rebate on abrasives and ceramics from April 2026, potentially narrowing the price gap with Indian products.
Carborundum Universal, Wendt India and Grindwell Norton have drawn investor attention as the policy shift and their business transitions put the sector in focus.
Carborundum is investing in specialised capabilities, while management expects FY27 ceramics revenue growth of 23%–25%.
Wendt India’s Super Abrasives business remained its main profit engine, while its Machines & Accessories division reported higher revenue and a narrower loss in Q1FY27.
Grindwell Norton’s Ceramics & Plastics segment has grown faster than its abrasives business and contributed more profit in the June 2026 quarter.
- Who
- Carborundum Universal, Wendt India and Grindwell Norton, Indian abrasive and materials companies.
- What
- China’s removal of an export tax rebate may improve the competitive position of Indian manufacturers, while their expansion into higher-value materials offers a longer-term growth opportunity.
- When
- The rebate was withdrawn from April 2026; the article also reports Q1FY27 results and valuations dated October 4, 2026.
- Where
- India, in the abrasives and advanced materials industry, with the policy change in China.
- Why
- Without the rebate, Chinese exporters may face higher costs, potentially narrowing the price gap with Indian products; the companies are also pursuing higher-value markets.
Growth opportunity
Valuation and execution risks
China’s policy change
Growth opportunity
China’s removal of its 13% export VAT rebate from April 2026 could narrow the price gap between Chinese imports and Indian-made abrasives, supporting margins for Indian manufacturers.
Valuation and execution risks
The article says exporters may pass on the added cost or absorb it; it does not establish how much the change will improve Indian companies’ margins.
Moving into higher-value products
Growth opportunity
The companies are expanding in ceramics, super abrasives and advanced materials for areas including semiconductors, aerospace, defence and EVs, where precision and qualification can matter more than price.
Valuation and execution risks
The opportunity depends on these businesses scaling their products and executing growth plans; the article notes that the stocks’ higher earnings potential is not guaranteed.
Stock valuations
Growth opportunity
Historical valuation comparisons may be less relevant if the companies’ product mix and earnings profiles change.
Valuation and execution risks
Carborundum Universal and Wendt India traded at P/E ratios well above their five-year medians, so earnings growth would need to support the premium valuations.
- China policy change
- China withdrew its 13% export VAT rebate on abrasives and ceramics from April 2026.
- Companies discussed
- Carborundum Universal, Wendt India and Grindwell Norton.
- Carborundum Universal
- Q1FY27 consolidated sales rose 16.9% year over year to ₹1,411 crore; management expects FY27 ceramics revenue growth of 23%–25%.
- Wendt India
- Q1FY27 Super Abrasives revenue rose nearly 15% year over year to ₹41.6 crore, with profit before interest and tax of ₹7.6 crore.
- Grindwell Norton
- In Q1FY27, Ceramics & Plastics generated ₹75 crore in profit before interest and tax, compared with ₹49 crore for abrasives.
- Valuations
- As of October 4, 2026, the article reported P/E ratios of 94.2 for Carborundum Universal, 95.8 for Wendt India and 50.1 for Grindwell Norton.
- Investment caveat
- The article describes itself as educational, not an investment recommendation, and advises consulting an independent adviser.