Balkrishna Industries Stock Analysis

Areas/vehicles where Balkrishna Tyres find their place

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BALKRISHNA INDUSTRIES STOCK FUNDAMENTAL VIEW

YEAR ENDING MAR 17 – Balkrishna Industries Ltd. key Products/Revenue Segments include Tyres which contributed Rs 3722.14 Crore to Sales Value (98.25 % of Total Sales), Revenues Up 15% Yoy and volume growth of 14.1 %Yoy. EBITDA margins came in at 25.5% (up 41bps Yoy but down 605 bps QoQ) vs. estimate of 28.9%. With higher input cost (average natural rubber prices were up 52.3% Yoy & 22.5% QoQ to | 152/kg in Q4FY17) its gross margin contracted 636 bps Yoy & 642 bps QoQ. Margins, however were partly supported by lower staff cost (down 99 bps Yoy) & other expense (down 578 bps Yoy). PAT grew 1.8% Yoy | 137 Crore vs. estimate of | 160 Crore The Company’s earnings are mainly generated through exports. The previous year has been good due to revival in commodity cycle and overall good agricultural activities across the globe. Strengths include Export niche, significant labour cost advantage, & Focus on OHT mining Segment. However, the long term prospects of the Company are good and promising. Company continues to explore all the avenues to ensure growth of the business which includes, deeper penetration into existing market within India as well as outside India, extending relationship with OEMs and expanding product range. With all such efforts, your Company has aimed to achieve higher sales during the current year.
Q4 ENDED 30-06-2017– For the quarter ended 30-06-2017, the company has reported Standalone sales of Rs 1012.77 Crore, up 0.98 % from last quarter Sales of Rs 1002.94 Crore and up 11.23 % from last year same quarter Sales of Rs 910.48 Crore Company has reported net profit after tax of Rs 153.14 Crore in latest quarter.Outstanding Long Term Debt at USD 67mn; USD 33mn to be repaid in August 2017.EBITDA margins for Q1fy18 was 25.5% & PAT at rs 153 Cr with a growth of 3% On Yoy basis.Volume growth for Q1FY18 at 7% Yoy to 46327 MT and annual Volume Guidance at 185,000MT – 190,000 MT compared to 172419 MT in F.y 2017. (As per Ind-AS).

Note: As part of a backward integration plan to have a greater control on supply chain, Board of Directors have approved setting up of a Carbon Black project at its Bhuj Plant with an Initial annual capacity of 60,000 MT at a capex of Rs.150cr

BALKRISHNA INDUSTRIES STOCK TECHNICAL VIEW