Please refer to important disclosures at the end of this report
1
Balkrishna Industries Limited (BKT) is a leading manufacturer in the Off-Highwa
y
tire market. BKT has successfully focused on specialist segments such as
agricultural, construction and industrial vehicles as well as earthmoving, port and
mining, ATV, and gardening applications. As a result, BKT has developed into a
global player in the Off-Highway tire industry with a 6% market share. Europe
roughly accounts for 54% of the total revenue while US markets accounted fo
r
14%-15% until FY16 and in this quarter there has been a jump in the US share
by 300 to 400bps which recorded a volume growth. The management is
confident about increasing volumes through its US channels. On account o
f
higher OEM orders and increasing geographical expansion supported b
y
European Agri demand rise and US market growth, the company can see a
uptick move ahead. According to the management final verdict on anti-dumping
action is expected to be settled during Feb 2017E. Production of 2-wheeler tires
has commenced at the Bhuj plant and is under the testing phase which is
expected to be reflected by Q3FY17E. Management expects the company to be
debt free by FY18E were as share of US business to grow on account o
f
economic factors. The Company has a good return on equity (ROE) of 24.21%
for the last 3 years. Hence Buy.
BUY
CMP `1,175
Stock Info
Sector
Beta
Bloomberg Code
Shareholding Pattern (%)
Promoters 58.3
MF / Banks / Indian Fls 16.4
FII / NRIs / OCBs 18.3
Indian Public / Others 7.1
Abs. (%) 3m 1yr 3yr
Sensex (2.8) 12.7 28.2
Balkrishna Inds. 11.2 90.3 457.0
0.3
Reuters Code BLKI.BO
BIL@IN
10
BSE Sensex 27,258
Nifty 8,417
Face Value (
`
)
Tyres
Market Cap (
`
cr) 11,359
52 Week High / Low 1280/551
Avg. Daily Volume 13,397
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Balkrishna Industries
Others | Tyres
January 19, 2017
Balkrishna Industries | Tyres
January 19, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Balkrishna Industries
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
< -15
)