Balkrishna Industries slips after a post results run-up

Balkrishna Industries slips after a post results run-up

by 5paisa Research Team Last Updated: 2022-02-16T19:07:08+05:30

The stock price, which went up by nearly 2% after the results came out, has slipped by 5.8% today.

Balkrishna Industries Ltd, an Indian multinational company that manufactures tires for agricultural, industrial and construction, earthmover and port, mining, forestry, lawn and garden and all-terrain vehicles (ATV), has seen a fall in its share price today.

The company had declared its results on Monday, after market hours. While the share price closed higher by 1.85% yesterday, it has plunged by 5.8% today.

While the company is a leading player in the tire manufacturing space, the results show that the company has not been able to escape the brunt of rising inflation.

In Q3FY22, on a consolidated basis, Balkrishna’s net revenues were up by 35.55% to Rs 2045.81 crore. Its sales volumes were higher by 18% YoY. However, the rise in raw materials, logistics costs coupled with higher marketing spending and power & fuels expenses pulled the PBIDT (ex OI) income down. It stood at Rs 456.65 crore, down by 4.78% on a YoY basis. While the PAT was up by 4.27% YoY, a rise in tax expenses caused a 497-bps contraction in the corresponding margin.

As per the management, the company continues to maintain a 28-30% EBITDA margin on a long-term sustainable basis. Their sales volume guidance for FY22 stands at 275,000 – 285,000 MT.

Moreover, the company’s capex plans are on track. The Brownfield capex at Bhuj will enhance the tire manufacturing capacity by 50,000 MTPA, whereas the achievable capacity by end of FY23 is expected to reach 360,000 MTPA. These capacity additions shall help the company to meet the strong demand for its products.

At the time of market close, the share price of Balkrishna Industries Ltd was trading at Rs 2002.80, a decline of 5.80% from the previous day’s closing price of Rs 2126.10 on BSE.


Also read: List of Top 10 Penny Stocks: These Shares Gained Up To 5% on Wednesday, February 16

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