Buy Balkrishna Industries; target of Rs 2820: ICICI Securities

ICICI Securities research report on Balkrishna Industries

India OHT exports in Jan’24, at USD 151mn, were higher by 13% YoY as against USD 139mn average monthly exports in CY23. This was driven by strong growth in EU/US agri segment, with overall agri segment exports being up ~17% YoY vs. OTR exports being up 6%. In US, base turned favourable from Jan’24 as expected in both agri/OTR segments, leading to YoY growth of 32%/23%; in comparison, EU saw growth of 23%/5% with the effects of a favourable base already kicking in a quarter back. We expect, in FY24, India OHT exports to deliver ~10% growth YoY on a base of USD 139mn a month on an average in CY23; against that, we build in 12% volume growth for BIL to our FY24 estimates.

Outlook

We maintain BUY on BIL with a DCF-based unchanged TP of INR 2,820, implying 25x FY26E EPS.

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