Balkrishna Industries Ltd. share price target

Balkrishna Industries’ (BIL) Q2FY23 EBITDA margin at 20.1% was in-line and flat QoQ, with gross margin decline of 225bps QoQ getting balanced by lower other expenses (down 200bps QoQ).

Balkrishna Industries (BIL) reported revenue of INR 26,194 Mn in Q1FY23. This is a growth of 45.3% YoY and 10.3% QoQ.

Balkrishna Industries’ (BIL) Q1FY23 EBITDA margin at 20.1% was down 366bps QoQ on elevated freight and power/fuel costs, coupled with higher than normal branding-related expenses.

Balkrishna Industries (BIL) reported strong demand trends in its key overseas markets with May’22 industry exports up 24% YoY. Though the data indicates continued momentum in OTR segment (up 32% YoY) and steady agri demand (up ~19% YoY), overall sales are up 4% QoQ (prorated) despite seasonality, and supply chain issues.

With global OTR demand continuing to remain strong in Q1 despite inflationary pressures along with prices of key agricultural commodities like corn and soya remaining steady, we do not see much risk to BIL’s guided volume growth of ~10-12% in FY23.