Motilal Oswal's research report on Balkrishna Industries
Balkrishna Industries (BIL)’s 2QFY25 was operationally better than expected with EBITDA of INR6.2b (+13% YoY, est. INR5.9b), led by better ASP and lower promotional expenses. However, Adj. PAT was in line. Weak demand in its key markets (ex India) remains the key cause of concern going forward even as margins are likely to stabilize at current levels for H2. Our earnings estimate remains unchanged. Most of the positives seem priced in at current valuations. We maintain our Neutral rating with a TP of INR2,890, based on ~24x Sep’26E EPS.
Outlook
At a P/E multiple of 34x/26x FY25E/FY26E EPS, most of the positives seem priced in. We value BIL at 24x Sep’26E EPS (vs ~22x, 10-year LPA) to arrive at our TP of INR2,890. We reiterate our Neutral stance on the stock.
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