Hold Balkrishna Industries: target of Rs 1800: Sharekhan
Sharekhan recommended hold rating on Balkrishna Industries with a target price of Rs 1800 in its research report dated February 09, 2021.
February 11, 2021 / 01:06 PM IST
Sharekhan's research report on Balkrishna Industries
BKT reported another strong quarter in Q3FY21 with PAT improving 42% y-o-y, aided by volume growth and margin expansion. The stock is trading at premium to its historical averages at P/E multiple of 20.4x and EV/EBITDA multiple of 14.2x its FY2023E estimates.
Despite strong operational performance in Q3FY21, we are concerned that Balkrishna Industries Limited’s (BKT) return ratios and EBITDA margins would decline in the medium-term, owing to significant capex commitment towards non-core business. Thus we downgrade the stock to Hold rating with a PT of Rs 1,800.
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