KR Choksey's research report on Balkrishna Industries
For Q1FY25, BIL reported robust revenue of INR 27,145 Mn (+25.7% YoY, +1.2%QoQ), which outperformed our estimates. Gross margin for the quarter expanded by 47 bps YoY (-88 bps QoQ) to 52.3%. In Q1FY25, EBITDA grew by 32.6% YoY (-2.5% QoQ) to INR 6,640 Mn, which beat our estimate on higher gross margins and possibly due to favorable operating leverage. PAT for the quarter was at INR 4,900 Mn (+47.6% YoY, +0.7% QoQ), which beat our estimate on higher-than-estimated other income and lower-than-estimated finance cost and tax rate. We lower our FY26E EPS by 7.6%, assuming a cautious stance on volume and margins due to market uncertainties.
Outlook
We maintain a P/E multiple of 26.5x to FY26E EPS of INR 104.5 to arrive at a price target of INR 2,768/share (previously: INR 2,998). Given the marginal downside potential from CMP, we maintain our rating of "REDUCE" for Balkrishna Industries' shares.
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