Balkrishna Industries Q3 Review— Headwinds Clearing With A Few Bumps Ahead; Nirmal Bang Maintains 'Hold'

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Nirmal Bang Report

We have revised our estimates of volume growth from 7% volume compound annual growth rate to ~9% CAGR over FY24-FY27E and built in a margin improvement of 150 bps in FY26 to 25.7% and further to 26.2% for FY27.

We believe that Balkrishna Industries Ltd. is a very strong franchise and marketing efforts across geographies will result in better offtake along with its low-cost operations resulting in superior margins.

We maintain Hold rating with a target price of Rs 2,855 (Rs 2,603 earlier) and roll forward to Dec’26E EPS. ~20% discount to five-year mean multiple due to pressures on return ratios from capex intensity in FY26 (Rs 11-12 billion guided for the year).

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