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Balkrishna Industries Q1FY18: Buy for medium to long term investment - IndiaNotes.com
Balkrishna Industries Q1FY18: Buy for medium to long term investment
Suhani Adilabadkar | Published: 21 Sep, 2017  | Source : IndiaNotes.com
  • BALKRISHNA  Industries  Ltd,  India’s  largest  ‘Off  Highway  Tire  Manufacturer’  reported  mixed  June quarter  with  Revenue  &  PAT  rising  8%  &  3%  respectively  YOY.  

  • PAT  stood  at  Rs.  1531  Mn  against  Rs.1491  Mn  corresponding  period  previous  year.

  • Revenue was seen at Rs. 10128  Mn rising 8% YOY  and  stood  at  Rs.  9420  Mn  in  Q1  FY17.  Volume  growth  for  the quarter stood at 7%.

  • EBDITA declined  5% and was  reported  at  Rs.  3085  Mn  in  Q1  FY18  against  Rs.  3255 Mn corresponding quarter previous year. Profit Before  tax  was  stagnant  at  Rs.  2278  Mn  in  the  current  June quarter.

  • Other Income galloped three times YOY at Rs. 923  Mn  against  Rs.  344  Mn  corresponding  period previous  year  buttressing  company’s bottom-line  in  the  current  quarter.  EBDITA  Margin  declined  409  bp as  operating  expenditure  jumped  22%  YOY.

  • Operating  expenditure  stood  at  Rs.  7966  Mn  compared to Rs. 6510 Mn  same quarter previous year.

  • One basis  point  is  1/100th of  a percentage.  EBDITA &  Net  Profit  Margin  stood  at  30.46%  &  15.12%  in  the current  June  quarter. 

  • The  company  continued  its deleveraging  exercise  and  interest  costs  have  been  further pruned by 22% on yearly basis.

  • Balkrishna  Industries  Ltd  (BKT)  is  India’s  leading global,  ‘Off  Highway  Tire’  player  catering  to  130 countries  through  distribution  network  in  Americas, Europe, India and Rest Of the World.  BKT with market cap  of  Rs.    164711  Mn  has  more  than  85%  of  its earnings  dependent  on  exports.

  • The  company  has  performed in the backdrop  of slow global growth and high  currency  fluctuations.  In  addition  to  that  BKT  is  also  focused  on  rationalizing  its  debt  burden  by utilizing  its  high  cash  holdings.  

  • The  company  has repaid  long  term  debt  of  around  Rs.  3760  Mn  in  Q1 FY18.  Current cash holdings stand at Rs. 11350 Mn.

  • We recommend BUY  for the stock  for medium & long term  investment  with  PE  multiple  of  20.57  x  FY18E  & 18.18 x FY19E with a target price of Rs. 1920.

  Read full report Click here to read the full report


About Suhani Adilabadkar

Suhani Adilabadkar is a Research Analyst registered with SEBI ((INH200003240)) She has done PGDBA (Finance), MS (Finance) and a Fellowship from Insurance Institute of India. She maintains a blog where she publishes research reports across industries - oasisfundamentals.blogspot.in.


For more information please write in to editor@indianotes.com


Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.

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