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Dolat Capital Report
Balkrishna Industries Ltd. printed a resilient performance in Q4. Revenue grew 17% QoQ to Rs 23.7 billion led by 10% volume growth. Ebitda margin contracted 80 basis points QoQ to 21% on elevated raw material, energy, marketing and logistic cost.
Management has guided production of 320-,330k million tonne for FY23 (11-14% volume growth over FY22) led by robust demand of agri and off the road tyres across geography.
Higher raw material inflation, elevated logistic cost, sharp jump in power and fuels expenses have impacted margin in Q4.
Balkrishna Industries has taken 2-3% of the price hike and is planning to take another price hike of 3-4% in June 2022.
We expect operating leverage benefit and normalisation of power and freight cost will help in sharp margin expansion from Q2 FY23.
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