Balkrishna Industries - India’s Off-Highway Tyre Exports On Gradual Recovery Path: ICICI Securities

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. .ICICI Securities Report.Post stocking up of off-highway tyre inventory at distributor level in end markets between Mar-July 2022, India’s OHT exports from Aug-22 were muted as a result of destocking amid improving container availability. OHT exports from the country bottomed out in Oct-22 at ~$130 million versus Mar-July 2022 average of ~$170 million and recovered to a five-month high of $152 million in Dec-22. For Balkrishna Industries, as against its long-term average share of India’s OHT exports at ~50%, it expanded to ~59% in H1 FY23, likely driven by excess stocking at the dealer level. Company’s OHT exports then saw a sharp reversal in Q3 FY23 with mean reversion in inventory levels taking the share down to ~40%. We believe Q3 FY23 was an outlier quarter in terms of volume/share as Balkrishna Industries had to undergo aggressive destocking. Dec-22 OHT exports were up 6% month-on-month driven by improvement in agri OHT segment, though down 9% YoY. India’s OHT exports in 9M FY23 were up ~8% with the ~15% decline in the Europe getting balanced by growth in U.S. and rest of world. We are building-in 8%/10% volume growth for Balkrishna Industries in FY24E/FY25E with Ebitdam at 24.5%/26.5%, respectively..Click on the attachment to read the full report:.Ceat - Profitability On A Comeback Trail: ICICI Securities .DISCLAIMERThis 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.

Balkrishna Industries - India’s Off-Highway Tyre Exports On Gradual Recovery Path: ICICI Securities

Company’s OHT exports then saw a sharp reversal in Q3 FY23 with mean reversion in inventory levels taking the share down to ~40%.

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