Mahajan told CNBC-TV18, "Balkrishna Industries has got a unique model. There is a major competition between the two-wheeler and four-wheeler tyre manufacturers. The OTR(off the road) tyres and Tractor tyres which find application in the industrial segment, the construction equipment, mining space. They make tyres for 200-250 horsepower tractors which are much bigger than the Indian tyres. This company has 90% exports to Europe and US and also to South East Asian countries. Some of the major clients include OEM's like JCB, Terex and John Deere."
He further added, "Out of exports 90% is replacement market turnover and as a result the margins are on a higher side. There is major shortage of OTR tyre in the world and this company is growing at a 30-40% rate YoY. Our price target on this is Rs 800 in the medium term."
