Neutral Balkrishna Industries; target of Rs 2257: Motilal Oswal

Motilal Oswal's research report on Balkrishna Industries

Balkrishna Industries’ (BIL) 2Q earnings at INR2.7b were below our estimate of INR3.7b due to an adverse mix, the impact of US tariffs, and weak demand. BIL continues to face demand headwinds in its key global markets. While the stock has underperformed in the recent past and valuations at 29.3x FY26E and 23.6x FY27E are not too demanding, its future target multiple is likely to depend on its ability to succeed in these new segments—not only by capturing market share, but by doing so without materially hurting core returns—which, in our view, is likely to be a challenge. We have not changed our target multiple for BIL yet and continue to value it at 22x Sep’27E. Reiterate Neutral with a TP of INR2,257.

Outlook

We have not changed our target multiple for BIL yet and continue to value it at 22x Sep’27E. However, this may warrant a change going forward if BIL’s returns plunge due to this foray. Reiterate Neutral with a TP of INR2,257.