Hold Balkrishna Industries; target of Rs 2370: Deven Choksey

Deven Choksey report on Balkrishna Industries

In Q2FY26, Balkrishna Industries (BIL) reported a weaker-than-expected performance, with both revenue and profitability missing our estimates amid softer demand, adverse mix and limited operating leverage. Demand remained uneven across key geographies, while margins were further impacted by subdued scale, lower other income and a higher effective tax rate. Revenue: Revenue from operations declined by 13.3% QoQ / 1.1% YoY to INR 23,935 Mn, marginally below our estimates (-10.0% variance). YoY performance was supported by steady realization trends, while QoQ decline reflects weaker volume traction and normalization from a strong Q1 base. The India business continued to provide relative support, although global OHT (Off-Highway Tire) demand remained muted.

Outlook

We have rolled forward our valuation basis to Sept’27 estimates. We value Balkrishna Industries at 23x Sept’27 EPS, implying a target price of INR 2,370. We downgrade our “ACCUMULATE” rating to “HOLD” on the stock as near-term volume and margin visibility remains constrained amid continued softness in key export markets.

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