ICICI Direct has given Buy recommendation for Balkrishna Industries with a target price of Rs. 2100 in its research report issued on Feb 09, 2021
ICICI Direct’s research report on Balkrishna Industries
Balkrishna Industries (BIL) reported robust Q3FY21 results. Standalone revenue was at Rs 1,505 crore (up 30% YoY), amid ~26% rise in volumes to 59,810 MT. EBITDA for the quarter at Rs 476 crore was higher by 40% YoY with margins at 31.7% (down 233 bps QoQ). Consequent standalone PAT was at Rs 322 crore (up 46% YoY), aided in part by higher other income – which included forex gains amounting to Rs 15 crore. BIL declared a third interim dividend of Rs 5/share (record date: February 16, 2021).
We believe BIL deserves to command premium valuations as a result and upgrade the stock from HOLD to BUY with a revised target price of Rs 2,100 i.e. 27 P/E (i.e. ~1.5x PEG) on FY23E EPS of Rs 78 (previous target price Rs 1,770).
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