Sharekhan has given Hold recommendation for Balkrishna Industries with a target price of Rs. 2163 in its research report issued on Sep 07, 2022
Sharekhan’s research report on Balkrishna Industries
We have reduced Balkrishna’s FY23E and FY24E earnings by 15.9% and 18.8% on account of rising concerns over Europe’s crop yield and production, led by the severe heat wave and drought in various parts of Europe. EBITDA margins expected to remain under pressure, driven by unfavorable product mix and increase in other operating costs. Well geographically diversified portfolio, timely execution of capex plans, market share gains and entry into new markets continue to drive double digit revenue growth going forward, despite headwinds in European business.
Outlook
We downgrade our ratings on Balkrishna Industries Ltd (Balkrishna) to Hold, with a 12-month PT of Rs.2,163. Stock trades at P/E multiple of 23.2x and EV/EBITDA multiple of 16.8x its FY2024E estimates.