Balkrishna Industries- Base Finally Favorable To Drive 10%-Plus Growth For India OHT Exports: ICICI Securities

ICICI Securities Report

India off-highway tyre exports in January 2024, at $151 million, were higher by 13% YoY as against $139 million average monthly exports in CY23. This was driven by strong growth in Europe/US agri segment, with overall agri segment exports being up ~17% YoY versus OTR exports being up 6%.

In U.S., base turned favorable from January 2024 as expected in both agri/OTR segments, leading to YoY growth of 32%/23%; in comparison, Europe saw growth of 23%/5% with the effects of a favorable base already kicking in a quarter back.

We expect, in FY24, India OHT exports to deliver ~10% growth YoY on a base of $139 million a month on an average in CY23; against that, we build in 12% volume growth for Balkrishna Industries Ltd. to our FY24 estimates.

We maintain Buy on Balkrishna Industries with a discounted cash flow-based unchanged target price of Rs 2,820, implying 25 times FY26E earnings per share.

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