ICICI Securities: Balkrishna Industries - Industry Growth Revival Drives Upgrade 
Vredestein branded automobile tyres sit stacked in a storage area at the Apollo Tyres Hungary Kft plant in Gyongyoshalasz, Hungary. (Photographer: Akos Stiller/Bloomberg)  

ICICI Securities: Balkrishna Industries - Industry Growth Revival Drives Upgrade 

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Balkrishna Industries Ltd. continues to be remain one of our of high conviction ideas within I-Sec auto coverage universe. Yes, the stock has appreciated approximately 70% from its March 20 lows yet we believe it provides better risk reward vis-a-vis peers due to its standout earnings strength (expect FY21 to grow 3% YoY). The industry exports data has provided new insights which renew our confidence on growth rebound in H2 FY21. The latest monthly (June 20) industry export data indicates Vshaped rebound across agri tyres (Ag) at approximately 44% YoY / 32% MoM and off the road tyres (OTR) at -2.4% YoY / approximately 29% MoM.

We were slightly concerned post Q4 FY20 about the flat volume guidance for FY21 amidst the weak environment; however, these data points alleviate our near term growth concerns. We model in 0%/15% volume growth in FY21/FY22, approximately 18% earning per share (EPS)compound annual growth rate (CAGR) (FY20-22). We upgrade to Buy.

Click on the attachment to read the full report:

ICICI Securities Balkrishna Industries Update.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint 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 brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.