Balkrishna Industries Q1 Review - Robust Volumes, Margin Contracts QoQ: Systematix
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Systematix Research Report
Balkrishna Industries Ltd.'s Q1 FY22 operating performance was ahead of consensus and our estimates as gross margin contraction was offset by strong tonnage growth.
The management indicated that volume momentum in the agriculture segment continues while it is also improving across the industrial segment.
Balkrishna Industries has guided for FY22 volume growth of 250,000-265,000 tonnes (up 10-16% YoY).
It took a price hike of 2-3% in July 2021 to offset raw material inflation and freight costs.
The next leg of capex of Rs 19 billion over the next two years includes-
Rs 8 billion for Bhuj brownfield capacity expansion by 50,000 tonnes per annum,
Rs 6.5 billion for enhancing its carbon black capacity and
Rs 4.5 billion for modernisation and automation, which is on schedule.
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