has given Ecommended accumulate recommendation for Balkrishna Industries with a target price of Rs. 2290 in its research report issued on May 17, 2022
KR Choksey’s research report on Balkrishna Industries
Revenue exceeded estimates for Q4FY22 due to higher volumes at 77,119 Mt (+13.4% YoY). Revenue for Q4FY22 stood at INR 23,742 Mn (+35.4% YoY). For the FY22, revenue stood at INR 82,951 Mn (+43.4% YoY). For the quarter EBITDA stood at INR 5,031Mn (-8.6% YoY), with OPM at 21.2% (-1,020 bps YoY). During the quarter the Company commissioned the 50,000 MTPA brownfield tire plant at Bhuj and the complete ramp up in production is expected to be achieved in H2FY23. The Board has declared final dividend of INR 4 per equity share. Total dividend for FY22 will be INR 28 per equity share.
Outlook
On the back of continued strong revenue and volume growth performance, also with strong demand expected in FY23 and planned capacity addition, we value the stock at 22.8x on FY24E and arrive at a TP of INR 2,290 per share (unchanged), implying an upside potential of 12.0% from the CMP. Accordingly, we maintain our “ACCUMULATE” recommendation on the shares of Balkrishna Industries.