Buy Balkrishna Industries; target of Rs 1231: Edelweiss

Edelweiss is bullish on Balkrishna Industries has recommended buy rating on the stock with a target price of Rs 1231 in its research report dated December 01, 2016.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney IThe Winning Leap SME Special
Moneycontrol

Home » News » Recommendations

Dec 02, 2016, 03.43 PM | Source: Moneycontrol.com

Buy Balkrishna Industries; target of Rs 1231: Edelweiss

Edelweiss is bullish on Balkrishna Industries has recommended buy rating on the stock with a target price of Rs 1231 in its research report dated December 01, 2016.

Like this story, share it with millions of investors on M3

Buy Balkrishna Industries; target of Rs 1231: Edelweiss

Edelweiss is bullish on Balkrishna Industries has recommended buy rating on the stock with a target price of Rs 1231 in its research report dated December 01, 2016.

Post Your Comments

Share Cancel

(more)

, Edelweiss |

Edelweiss' research report on Balkrishna Industries

Balkrishna Industries’ (BKT) Q2FY17 result highlight was the strong 21% YoY spurt in volumes to 42,550MT (11% in Q1FY17). Revenues, at INR9.3bn (net of excise), was up 15% YoY as realisation corrected 5% YoY. Driven by strong gross margin expansion, EBITDA margin increased 130bps YoY to 33%. PAT surged 129% YoY to INR 2.4bn, aided by forex gain. Despite the growth, the company maintained its volume guidance of 160,000-170,000MT for FY17 with a margin guidance range of 28-32% (28-30% earlier). Factoring in the strong volume momentum and better margin expectations, we raise our FY17/18E EPS by 10%/11% and upgrade our multiple from 13.0x to 15.0x, driven by 17% volume CAGR over FY16-18E and opportunity in OTR market. This will drive a 521bps expansion in RoCE (323bps earlier). Also, utilisation at 68% in FY18E leaves further scope for growth without additional capex. Maintain ‘BUY’ with a revised TP of INR 1,231 (INR 958 earlier).

Factoring in strong volume momentum and better margin expectations, we raise our FY17/18E EPS by 10%/11%. We also upgrade our target multiple from 13.0x to 15.0x, driven by 17 % volume CAGR over FY16-18E and opportunity in OTR market. This will also drive 521bps expansion in RoCE (323bps earlier) over FY16-18E to 24.3%. Also, utilisation at 68% in FY18E leaves further scope for growth without additional capex. Maintain ‘BUY’ with TP of INR 1,231.

For all recommendations, click here

Disclaimer:
The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click here

Buy, Hold, Sell ? Hear it first on M3
Buy Balkrishna Industries; target of Rs 1231: Edelweiss

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login