We maintain Neutral with an upgraded TP of Rs 1,654 (rolled forward to 15x Jun-19E EPS). Balkrishna Industries (BIL) top line at Rs 10.1bn (+9% YoY) was in-line with expectations, largely led by 7% volume growth and 2% growth in net ASPs. EBITDA margin (26%) came in below our expectations owing to lower gross margins. BIL enjoys significant cost (25-30% lower than peers) and product mix (OTR) advantages, and is thus able to generate high margins. Given the volatility in rubber prices, we believe these margins are not sustainable, despite a strong demand outlook in the global off-highway vehicle market.