Buy Balkrishna Industries, target price Rs 2661: ICICI Securities

has buy call on Balkrishna Industries with a target price of Rs 2661. The current market price of is Rs 2252.8. Time period given by analyst is one year when . price can reach defined target.

Balkrishna Industries Ltd., incorporated in the year 1961, is a Large Cap company (having a market cap of Rs 43419.04 Crore) operating in Tyres sector.

Balkrishna Industries Ltd. key Products/Revenue Segments include Tyres & Tubes, Export Incentives, Scrap and Other Operating Revenue for the year ending 31-Mar-2022.


For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 2483.58 Crore, up 15.04 % from last quarter Total Income of Rs 2158.85 Crore and up 36.86 % from last year same quarter Total Income of Rs 1814.74 Crore. Company reported net profit after tax of Rs 374.84 Crore in latest quarter.

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Investment Rationale
Balkrishna Industries () reported strong demand trends in its key overseas markets with May’22 industry exports up 24% YoY. Though the data indicates continued momentum in OTR segment (up 32% YoY) and steady agri demand (up ~19% YoY), overall sales are up 4% QoQ (prorated) despite seasonality, and supply chain issues. Data continues to support the robust demand momentum driven by both agri and OTR segments (FY23-TD industry exports are up ~28% YoY on USD basis), aided by lower base of Q1FY22. Regionally, growth in May’22 was led by the US market (up 60% YoY) followed by RoW at 44% YoY. Current rise in natural rubber (~7% since Q4FY22) prices (chart 7) coupled with elevated container rates are likely to sustain pressure on H1FY23E margins. Better cost arbitrage, improving infra/mining investments across key markets of US/EU despite adverse macros supports our revenue growth assumption of ~18% CAGR over FY22-FY24E (~13% volume CAGR). Maintain BUY.

Promoter/FII Holdings
Promoters held 58.29 per cent stake in the company as of 30-Jun-2022, while FIIs owned 14.3 per cent, DIIs 11.17 per cent.

(Disclaimer: Recommendations given in this section or any reports attached herein are authored by an external party. Views expressed are that of the respective authors/entities. These do not represent the views of Economic Times (ET). ET does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same. Please consult your financial adviser and seek independent advice.

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