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Dolat Capital Report
Balkrishna Industries Ltd. printed a dismal performance in Q1. Revenue grew 11.5% QoQ to Rs 26.46 billion led by 7.8 % QoQ volume growth. Ebitda margin contracted 383 bps QoQ to 17.2 % on elevated employee, power, marketing and logistics cost.
Balkrishna Industries has guided Q2 volume would be muted due to heat waves in Europe and de stocking at dealer level, however sales guidance for full year remains intact at 320-330k million tonne for FY23 (11-14% volume growth over FY22) led by strong volume growth in H2 FY23.
Higher raw material inflation, elevated logistics cost, sharp jump in power and fuels expenses have impacted the margin in Q1. Balkrishna Industries has taken 5% price hikes. Gross profit per vehicle is continually improving despite raw material pressure while there is sharp jump in other expenses per kg basis (35% jump in last two quarters).
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