Balkrishna Industries surges 9%, hits record high on robust Q4 results

Shares of Balkrishna Industries surged 9 per cent to hit a record high of Rs 2,062 on the BSE in intra-day trade on Monday after the company reported robust March quarter (Q4FY21) numbers. The stock of the auto tyres & rubber products maker surpassed its previous high of Rs 1,965.90, logged on May 12, 2021.

The company’s standalone revenue came in at Rs 1,746 crore, up 29 per cent year on year (YoY), on the back of healthy volume growth. The company achieved highest ever quarterly sales volume of 68,002 MT, up 17 per cent YoY.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin improved 254 basis points (bps) YoY at 31.9 per cent from 29.3 per cent in the year-ago quarter. Profit after tax (PAT) was up 45 per cent YoY to Rs 372 crore from Rs 257 crore in the corresponding quarter of previous fiscal.

The management said the demand continues to be robust in Agriculture segment across Geographies. In the other segments, demand has seen an uptick on back of increased commodity prices, infrastructure creation and pick-up in economic activity.

For FY22, the company is guiding sales volume between 250,000-265,000 MT. We strongly believe that this demand trend is likely to continue in FY22 and years to come; however, there may be covid 19 related softness in demand leading us to give a wider range for annual guidance, the management said. The company declared a final dividend of Rs 5 share for the financial year 2020-21 (FY21), with total dividend declared for FY21 including interim dividend at Rs 17 per share.

“Balkrishna Industries continues to deliver on growth parameters while maintaining its anti commodity characteristics (lean B/S, high profitability, double-digit return ratios). Q4FY21 volumes were the highest ever at 68,002 MT, with the company guiding for around 10-17 per cent YoY tonnage growth to 2.50- 2.65 lakh MT in FY22E. Backward integration via carbon black plant provides a natural cost hedge, with long term margins seen remaining in the 28-30 per cent range,” ICICI Securities said in a note.

At 10:54 am, the stock was up 8 per cent at Rs 2,043 on the BSE, as compared to 0.97 per cent gain in the S&P BSE Sensex. The trading volumes on the counter jumped over three-fold with a combined around 1.9 million equity shares changing hands on the NSE and BSE.