Balkrishna Industries Reports Highest Ever Sales Volumes In Q2
Sales volumes rose 36% year-on-year to 61,224 million tonnes in the July-September period.
Balkrishna Industries Ltd. reported its highest ever sales volume during the three months ended September, the first full quarter of operations after the nation eased lockdown curbs.
Sales volumes rose 36% year-on-year to 61,224 million tonnes in the July-September period, according to an exchange filing. That helped the tyremaker post a 47.4% increase in its overall revenue at Rs 1,578 crore, compared with the Rs 1,274-crore consensus estimate of analysts tracked by Bloomberg.
Other highlights (year-on-year)
- Net profit rose 16.7% to Rs 339.5 crore—higher than the estimated Rs 232 crore
- Earnings before interest, tax, depreciation and amortisation jumped twofold to Rs 536.8 crore. Anslysts had pegged the operating profit at Rs 387 crore
- Ebitda margin expanded 900 basis points to 34%, aided by higher sales and lower input costs.
- The board has declared a second interim dividend of Rs 4 apiece.
Balkrishna Industries, in a post-earnings conference call, however, said it expects to post marginal volume growth for the fiscal ending March 2021 amid a resurgence of Covid-19 cases in Europe, which accounts for 51% of the company’s overall volume. Still, demand continues to remain strong in the agriculture segment across geographies, while that in other segments is stable, it said.
“A successful backward integration is expected to mitigate some of the upcoming pressure in input costs and thereby protect margin,” Shashank Kanodia and Jaimin Desai of ICICI Direct wrote in a post-earnings note. The brokerage raised its price target on the stock to Rs 1,700 apiece from Rs 1,500 and reiterated its ‘buy’ recommendation.
Of the 27 analysts tracking Balkrishna Industries, 16 have ‘buy’ ratings, five recommend a ‘hold’ and the rest suggest a ‘sell’. The stock is trading 2.6% higher than its Bloomberg consensus 12-month price target of Rs 1,415.3 apiece.
Shares recovered from the day's low to end 2.65% higher at Rs 1,491.5. The stock ended at an all-time high, gaining for the fifth straight day. This is the longest winning streak for the stock in four months.