Please refer to important disclosures at the end of this report
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
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.
CMP `1074
52 Week High / Low
Avg. Daily Volume
Market Cap (` cr)
BSE Sensex
Face Value (`)
Reuters Code
Jaikishan Parmar
022 3935 7600 Ext: 6810
Balkrishna Industries Ltd
Others | Tyres
Jan 27, 2020
Balkrishna Industries| Tyres
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
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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)