1
Please refer to important disclosures at the end of this report
1
1
Balkrishna Industries (BIL) is engaged in the business of manufacturing and
selling of Off-Highway Tyres (OHT) in the specialist segments such as
Agricultural, Industrial & Construction and so on. BIL has commanded a
substantial market share in this segment(~80-90%). The Company’s
performance was consistent throughout with a 3 year CAGR of 19% in
profits.
Over the years, BIL has emerged as a niche export-oriented player in the off
highway tyre (OHT) segment, with Europe (48%) and North America (20%)
currently forming 68% of revenues. Industry’s OHT exports to these regions
have shown signs of strength in recent months, albeit on a soft base. The
Carbon Black plant Phase 1 with a capacity of 60,000 MT was
commercialized during 2QFY20. The second phase of 80,000 metric tons is
progressing as per schedule and will be operational in FY21 with an outlay
of 500 cr.
On the financial health front, the company’s balance sheet looks strong with
reducing debt dependence. The debt-equity has come down to 0.2x in FY19
from 1.4x in FY14. Currently, the stock trades at 27x of its earnings and
delivers 22.8% RoCE. It also pays an average annual dividend of 15%.
Hence, recommend BUY on the stock.
BUY
CMP `1074
52 Week High / Low
1298/682
Avg. Daily Volume
36,018
Tyres
Market Cap (` cr)
20,759
2
BSE Sensex
41,155
Nifty
12,119
Face Value (`)
Reuters Code
BLKI.BO
BIL IN
1.0
Jaikishan Parmar
022 3935 7600 Ext: 6810
jaikishan.parmar@angelbroking.com
Balkrishna Industries Ltd
Others | Tyres
Jan 27, 2020
2
Balkrishna Industries| Tyres
2
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
DISCLAIMER
Angel Broking Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited, Bombay
Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL and
Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Limited is a registered entity
with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number INH000000164. Angel
or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities
Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public offering of securities of
the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,
nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While
Angel Broking Limited endeavors to update on a reasonable basis the information discussed in this material, there may be regulatory,
compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Disclosure of Interest Statement Balkrishna Industries
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)