BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
HDFC Securities Institutional Equities
While Balkrishna Industries Ltd. enjoys a sustainable competitive advantage over global peers in the off-highway tyres segment, the global OHT demand outlook remains uncertain, given the erratic weather conditions in Europe and recessionary trends in the U.S. and Europe.
Further, Balkrishna Industries margin has declined to a multi-quarter low of 20% due to-
high input costs;
a sharp increase in freight costs; and
adverse currency movement.
We assume its margin would normalise gradually to 27.5% by FY25E as these cost headwinds normalise.
Significantly high capex trends in the last five years have hurt Balkrishna Industries' returns and remains a key cause of concern. Capex is likely to remain elevated in the near term as-
Balkrishna Industries has recently temporarily deferred Rs 4 billion of capex for plant refurbishment and
it is expected to hit 90% utilisation level in FY23E.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
