Balkrishna Industries stock fell 1.5% to lows of Rs 2352.75 apiece as sales volume slipped. Net sales clocked in at Rs 2,159.35 crore in June 2023, falling 17.56% on-year. Net profit rose 8.12% on-year to Rs 331.88 crore, up from Rs 306.96 crore in the corresponding quarter in the previous fiscal.
Balkrishna Industries stock has surged over 3% in the last one month and over 10% year to date. Analysts at Nuvama have recommended a ‘Buy’ rating on Balkrishna Industries shares, while ICICI Securities and HDFC Securities have recommended an ‘Add’ and a ‘Reduce’ rating on the stock, respectively.
“Over years, the company has outpaced the underlying industry driven by a compelling mix of quality and price. We expect a gradual volume recovery H2FY24 onwards led by improved demand in key export markets and market share gains, not to mention a favourable base effect. We expect this outperformance to sustain with revenue/EBITDA CAGR of 12%/32% over FY23–25E. All in all, we maintain ‘BUY’ on the stock with a target price of Rs 2,740.”
ICICI Securities
Add | Target price : Rs 2577
“BIL faces challenges due to heat waves and recessionary fears in export markets from a near-term perspective. We are building-in flat/12% growth in sales volume and EBITDAM of ~23%/25% for FY24E/FY25E respectively. Maintain ADD on BIL with an unchanged DCF-based target price of INR 2,577, implying 26x FY25E EPS.”
HDFC Securities
Reduce | Target price: Rs 2148
“We factor in BKT’s margin to improve to 25% in FY24 (from 20% in FY23) on the back of reduced input costs, normalization of freight rates, and favourable Euro-INR hedge rate at INR 87-88 vs INR 85.3 for FY23 and expect it to improve to 27% for FY25, as operating leverage benefits are likely to kick in. However, despite factoring in most positives, the stock at 25.6x FY25E appears expensive. Maintain REDUCE with a revised TP of Rs 2,148 (INR2,083 earlier), as we roll forward to June-25 EPS (no change in target multiple).”