Motilal Oswal has given Neutral recommendation for Balkrishna Industries with a target price of Rs. 2320 in its research report issued on Feb 15, 2022
Motilal Oswal’s research report on Balkrishna Industries
IPCA’s 3QFY22 earnings was lower than our estimate. The reduced business in Sartans and muted business in the UK outweighed the robust performance in the Domestic Formulation (DF) segment. We cut our EPS estimate by 11%/10%/10% for FY22E/FY23E/FY24E to factor in: a) a gradual recovery in Losartan offtake, b) delay in product approvals in the UK market, c) higher raw material cost, and d) increased logistics cost.
Current valuations fairly reflect its industry-leading margin, FCF, and capital efficiencies. It currently trades at a P/E multiple of 25.6x/22.9x FY23E/FY24E EPS. Valuing BIL at 25x Mar’24E EPS (at a 25%/80% premium to its five/10-year average P/E), we arrive at our TP of INR2,320. We maintain our Neutral rating.
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At 13:55 hrs Balkrishna Industries was quoting at Rs 2,006.05, up Rs 3.25, or 0.16 percent.
It has touched an intraday high of Rs 2,056.40 and an intraday low of Rs 1,980.00.
It was trading with volumes of 16,777 shares, compared to its thirty day average of 16,372 shares, an increase of 2.47 percent.
In the previous trading session, the share closed down 5.80 percent or Rs 123.30 at Rs 2,002.80.
The share touched its 52-week high Rs 2,724.40 and 52-week low Rs 1,516.80 on 23 September, 2021 and 23 February, 2021, respectively.
Currently, it is trading 26.37 percent below its 52-week high and 32.26 percent above its 52-week low.
Market capitalisation stands at Rs 38,780.39 crore.