ICICI Direct's research report on Balkrishna Industries
Balkrishna Industries (BIL) is the leader in the niche tyre segment used in heavy machinery for mining and agriculture purposes. Exports form lion’s share of its sales at ~80% of its revenues • Channel mix: replacement account for ~70% while OEM share is pegged at ~28%. Agriculture accounts for ~64% of volumes with OTR share at ~33% • It has consistently operated with high margins and return ratios.
We retain BUY rating on BIL anticipating a strong margin recovery from Q4FY23, estimated double digit volume growth in FY24E & continued focus to gain prominence amid unchanged ambition of 10% global market share. Revising our estimates, we now value BIL at a revised target price of Rs 2,200 i.e. 22x P/E on FY24E EPS of Rs100 (earlier target price Rs 2,550).
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