ICICI Direct has given Buy recommendation for Balkrishna Industries with a target price of Rs. 2475 in its research report issued on May 14, 2022

ICICI Direct’s research report on Balkrishna Industries

Balkrishna Industries (BIL) is the leader in the niche tyre segment used in heavy machinery for mining and agriculture purposes. Exports form a lion’s share of its sales at ~80% of its revenues • Channel mix: replacement account for ~69% while OEM share is pegged at ~28%. Agriculture accounts for ~66% of volumes with OTR share at ~31% • It has consistently operated with high (>20%) margins & return ratios.

Outlook

We retain BUY amid robust demand outlook, portfolio attributable to healthy financials (high return ratios, EBITDA margins & 20%+ dividend pay-outs). We value BIL at revised target price of Rs 2,475 i.e. 24x P/E on FY24E EPS of Rs 103.2 (earlier target price Rs 2,650).

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