• Home
  • Opinion
  • Politics
  • World
  • Business
  • Science & Tech
Monday, August 15, 2022
No Result
View All Result
SUBSCRIBE
The Outlooker
27 °c
Delhi
  • Home
  • Opinion
  • Politics
  • World
  • Business
  • Science & Tech
  • Home
  • Opinion
  • Politics
  • World
  • Business
  • Science & Tech
No Result
View All Result
The Outlooker
No Result
View All Result
  • National
  • Politics
  • Opinion
  • Business
  • Science
  • World
  • Health
Home Business

Balkrishna Industries Rating: Buy; Poised to gain from demand revival

by The Outlooker Web Desk
November 24, 2020
in Business
0
Balkrishna Industries Rating: Buy; Poised to gain from demand revival
1.8k
SHARES
12.9k
VIEWS
Share on FacebookShare on Twitter

The latest export data continues to support the V-shaped demand rebound, YTD exports are up 5%.

Balkrishna Industries’ (BIL’s) key export markets continue to witness strong demand (Oct’20 industry exports grew 17% y-o-y). The industry growth momentum remains higher than our H2FY21 constant currency growth expectations for BIL of ~7% y-o-y. The latest industry export data (Oct’20) continues to be driven by agri (Ag) demand (up ~33%), while OTR witnessed a cool off with ~5% decline. Interesting to note, the USA region witnessed demand slack across segments (OTR+Ag: down 16%) which may be due to political uncertainty.

The latest export data continues to support the V-shaped demand rebound, YTD exports are up 5% led by Ag (up 15%). On a regional basis, in Oct’20, growth was led by EU region (up 30%). As BIL reaches peak utilisation in FY23 we expect it to clock best in class RoICs of >30%, justifying its superior valuation. Maintain Buy.

Overall export rebound continues as agri propels higher growth: Agri tyre and OTR tyre segments combine grew at a healthy 17% y-o-y in Oct’20 on solid prior year base. On an end-product basis, growth acceleration continued in Ag tyres (up 33%) and contributed ~66% of total exports (up 800 bps). On OTR side, growth momentum softened a trickle as it declined ~5% in Oct’20.

EU growth surge continues: On a regional basis, EU continues to deliver strong growth (Ag+OTR) at ~30% y-o-y, while the rest of the world (RoW) also grew ~28% y-o-y. The two regions together represent ~81% of Oct’20 exports. On the flip side, the USA region declined ~16% y-o-y (Ag dropped ~7% while OTR declined ~25%). Growth in EU exports was driven by France, Italy and Poland (together up ~90% y-o-y). In rest of the world (RoW), Australia and Argentina reported strong growth (up 192%/390% y-o-y, respectively). On a sub-segment basis, OTR growth was driven by EU region (up ~8% y-o-y/~34% contribution) while US declined ~25% (~26% contribution). However, on agri side, EU and RoW regions grew rapidly (up ~38% and 62%, respectively).

Agri exports recovery covers up the Covid-19 pandemic shock: After the initial Covid-induced demand shock (~23% decline) in Q1FY21, exports have since grown ~28% y-o-y. This has led to the overall industry clocking ~5% growth YTD. The pace of recovery has been quite sharp, surprising most investors. We believe outlook for global Ag exports continues to be strong under the rising commodity price environment. OTR demand is also likely to be aided by infrastructure investments in key developed markets in FY22 and beyond.

Maintain BUY: We expect strong FCF generation of ~Rs 28 bn over FY22e/23e. We raise our multiple to 24x (earlier: 22x) Sep’22e EPS of Rs 75.9 on the back of growth surprise to arrive at our target price of Rs 1,892 (earlier: Rs 1,735). Maintain Buy.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

The Outlooker is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

The Outlooker Web Desk

The Outlooker Web Desk

Next Post
44,684 Fresh Cases Take India’s Covid Tally To 87.73 Lakh

Delhi Reported 4,454 New COVID-19 Cases, 121 Deaths In Last 24 Hours

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

AAP’s Raghav Chadha’s Special Video Message On Independence Day
National

AAP’s Raghav Chadha’s Special Video Message On Independence Day

August 15, 2022
India ranked 11th in ISSF’s World Soft Power Index 2022
National

India ranked 11th in ISSF’s World Soft Power Index 2022

August 15, 2022
For Threat Calls To Mukesh Ambani, Man Detained By Mumbai Police
National

For Threat Calls To Mukesh Ambani, Man Detained By Mumbai Police

August 15, 2022
Aligarh: 21-year-old Brahmin youth who was reportedly abducted for 4 months, drugged & forced to drink urine, put under house arrest
National

Aligarh: 21-year-old Brahmin youth who was reportedly abducted for 4 months, drugged & forced to drink urine, put under house arrest

August 15, 2022

Connect with us

No Result
View All Result

Archives

  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020

Category

  • Artistic
  • Business
  • Crypto
  • Design
  • Entertainment
  • Fashion
  • featured
  • Food
  • Gaming
  • Health
  • Human
  • Lifestyle
  • Movie
  • Music
  • National
  • Opinion
  • Politics
  • Science
  • Spaces
  • Sports
  • Tech
  • Travel
  • Uncategorized
  • World

Recent Posts

  • AAP’s Raghav Chadha’s Special Video Message On Independence Day
  • India ranked 11th in ISSF’s World Soft Power Index 2022
  • For Threat Calls To Mukesh Ambani, Man Detained By Mumbai Police

About Us

The Outlooker

The Outlooker is your source of authentic, hand-picked news, stories, analysis from India & the World.

  • Terms Of Service
  • Privacy Policy
  • About us
  • Submit your story
  • Contact

© 2019-2021 The Outlooker. All rights reserved.

No Result
View All Result
  • Home
  • Politics
  • World
  • Business
  • Science
  • National
  • Entertainment
  • Gaming
  • Movie
  • Music
  • Sports
  • Fashion
  • Lifestyle
  • Travel
  • Tech
  • Health
  • Food

© 2019-2021 The Outlooker. All rights reserved.