Balkrishna Industries shares gained 7% following Q3 results; brokerages remain mixed

Balkrishna Industries shares gained sharply.

Balkrishna Industries shares gained 7 percent, on Tuesday, January 28, following its positive Q3FY2025 results. The results showcase 47 percent year-on-year (YoY) increase, in its third-quarter net profit, while revenue was higher by 12.6 percent YoY.

Balkrishna Industries' Q3FY25 revealed an increase of 47 percent year-on-year (YoY), in its third-quarter net profit, to Rs 449.5 crore. Previous fiscal year saw a net profit of Rs 305.4 in the same quarter. Its revenue was at Rs 2,560.3 crore, higher by 12.6 percent YoY, as against Rs 2,274.4 crore in Q3 FY23.

Balkrishna shares settled at Rs 2,727.1, higher by 6.3 percent in trade on January 28. However, over the past month, its shares have seen a five percent fall on the bourses.

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EBITDA margin rose to 24.8 percent, supported by higher volumes and lower rate of other expenses. The volumes increased by 60 percent YoY in the category of RoW (Rest of the World) and a 14 percent YoY growth in the Americas regions.

Brokerage house Nomura revealed its take on the stock, recommending a strong 'buy', basis growth potential and attractive valuations. The target price herein, stands at Rs 3,242, with a likeliness of a 22 percent upside.

Current weakness in demand in European markets is likely to be offset by growth in America, India, and other regions, supported by BIL’s focus on product development and network expansion. Given the uncertain global demand macro, brokerages like HDFC Securities and Motilal Oswal were negative on the stock.

HDFC Securities believes margins to be under pressure in Q4FY25 as higher RM cost and freight costs (which rose in Nov and Dec 2024) could impact the financials with a lag. Considering near-term uncertainties and lack of clear visibility of business normalization, the brokerage continues to maintain its 'sell' rating with a revised target price of Rs 2,092.