Balkrishna Industries tumbles after unveiling capex plans

Balkrishna Industries fell 7.15% to Rs 1266.50 at 14:29 IST on BSE after the company announced a capital expenditure plan of Rs 1700 crore.

The announcement was made on Saturday, 1 September 2018.

Meanwhile, the S&P BSE Sensex was down 84.76 points, or 0.22% to 38,560.31.

On the BSE, 1.35 lakh shares were traded in the counter so far compared with average daily volumes of 60,000 shares in the past two weeks. The stock had hit a high of Rs 1,363.50 and a low of Rs 1,255 so far during the day. The stock hit a record high of Rs 1,467.40 on 29 August 2018. The stock hit a 52-week low of Rs 790 on 1 September 2017.

Balkrishna Industries said that its board of directors at its meeting held on 1 September 2018 approved a capital expenditure (capex) plan of upto $100 million for setting up a greenfield tire plant in USA through a wholly owned subsidiary to be set up. The company shall also incur capex of upto Rs 1,000 crore for its Indian operations. The entire capex will be completed within a period of 30 months. This is in addition to the current capex underway for the carbon black plant. The entire capex of Rs 1,700 crore would be funded via a mix of debt and internal accruals.

Net profit of Balkrishna Industries rose 50.35% to Rs 230.25 crore on 34.62% rise in net sales to Rs 1362.39 crore in Q1 June 2018 over Q1 June 2017.

Balkrishna Industries (BKT) is a leading manufacturer in the off-highway tire market. The company focuses on specialist segments such as agricultural, construction and industrial vehicles as well as earthmoving, port and mining, ATV, and gardening applications.

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