Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Balkrishna Industries - Industry export growth accelerates - ICICI Securities

Posted On: 2021-09-07 18:13:04 (Time Zone: UTC)

Balkrishna Industries' (BIL) key export markets have reported strong demand trends (Jul'21 industry exports grew 51% YoY). The latest industry export data (Jul'21) indicates strong pickup in OTR segment (up 64% YoY) while agri (Ag) demand growth remained sturdy at ~46% YoY. The latest data continues to support the strong demand momentum driven by both Ag and OTR segments: FY21-YTD industry exports are up ~81% YoY on USD basis. On regional basis, growth in Jul'21 was led by the EU (up 59% YoY), followed by the US (44%) and RoW (43%). The QoQ acceleration in Q1FY22 is defying historical seasonality weakness across both Ag and OTR segments, which reflects the underlying demand pull. Exports acceleration in Jul'21 on MoM basis lends further strength to our revenue growth assumption (above consensus) of ~29% YoY for FY22 (~21% volume). We believe, consensus upgrades are likely if these trends sustain. Maintain ADD.

- Overall export growth continues as OTR rebounds: On an end-product basis, growth sustained in Ag tyres (up ~46% YoY) and contributed ~67% of total exports (down 259bps YoY). On the OTR side, momentum picked up with 64% growth YoY, which signals steady increase in mining and construction offtake. We believe the outlook for global Ag exports remains solid under the rising commodity price environment. OTR demand is also likely to be supported by infrastructure / mining investments across key regions (e.g. US, EU) as investments pick pace.

- EU leads the growth momentum: On regional basis, the EU delivered strong growth (in both Ag and OTR segments) at ~59% YoY while the US followed at ~44% YoY. The two regions together represent ~75% (up 149bps) of Jul'21 exports. On the flip side, RoW's growth momentum moderated to ~43% YoY (contribution down 149bps) impacted by high base and potential covid resurgence. Growth in RoW exports - driven by Australia (up ~1.2x), Brazil (~13x) and South Africa (2.6x) - reflects a more broad-based improvement across regions and segments (OTR/Agri). In the EU, Germany (up 36%), Italy (88%) and Ireland (93%) drove growth as the smaller economies of Portugal and Norway witnessed slump YoY. On a sub-segment basis, OTR growth was driven by the EU (up ~89% YoY) followed by the US (74%) and RoW (37%). However, on the Ag side, EU and RoW witnessed rapid growth at ~51% and 48%, respectively.

- Maintain ADD: As BIL reaches high utilisations in FY23E (assuming ~23% revenue CAGR over FY20-FY23E), we expect RoCEs to improve to >27%, and FCF generation to surpass Rs25bn (cumulatively over FY22-23E). The export incentive scheme (RoDTEP) also could provide additional boost to profitability. We maintain our target multiple at 26x FY23E EPS based on strong growth visibility and top-quartile return metrics. Maintain ADD with an unchanged target price of Rs2,572.

Shares of Balkrishna Industries Ltd., was last trading in BSE at Rs. 2474.1 as compared to the previous close of Rs. 2455.35. The total number of shares traded during the day was 27688 in over 3907 trades.

The stock hit an intraday high of Rs. 2506.65 and intraday low of 2436.15. The net turnover during the day was Rs. 68515441.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Automobile Sector - Monthly Quick View - Aug'21 - Mixed Performance across Segments - Reliance Securities

Axis Securities initiating coverage on ICICI Securities

Company Update - Minda Corporation - Q1FY22 - ICICI Direct

Quant Pick - PVR Ltd - ICICI Direct

Quant Pick - ONGC - ICICI Direct

Peak in the headline wholesale inflation is behind us - WPI August 2021 - Acuité Ratings

Sansera Engineering - IPO - Strong Outlook with Steady Cash Flow - Reliance Securities

APL Apollo Tubes - Journey from a semi-commodity player to a branded one - HDFC Securities

Nazara Technologies Ltd - Upbeat in medium-term, Uncertain over Long-term - YES Securities

IPO Review - Sansera Engineering Ltd - ICICI Direct

Overall index is still 0.3% lower than the pre-pandemic levels - IIP July 2021

YES SECURITIES on Monthly General Insurance & Mutual Funds Data

India urban logistics spaces expected to cross 7 million sq. ft by 2022: JLL

Neogen Chemicals - Breaking into the next orbit with a bang - HDFC Securities

Gladiator Stocks - Bharti Airtel Ltd - ICICI Direct

Gladiator Stocks - V-Guard - ICICI Direct

HDFC Life Insurance - Exide Life Acquisition - Maintain ADD - YES Securities

Gladiator Stocks - Grindwell Norton - ICICI Direct

Gladiator Stocks - Godrej Properties - ICICI Direct

Monthly Auto Volumes - August 2021 - ICICI Direct

Stock Tales - Easy Trip Planners - ICICI Direct

IPO Review - Vijaya Diagnostic Centre Ltd - ICICI Direct

AU Small Finance Bank - Attrition at top level remains key challenge; business momentum sustained in Jul/Aug'21 - ICICI Securities

Gladiator Stocks - State Bank of India - ICICI Direct

Gladiator Stocks - PNC Infratech - ICICI Direct

Vijaya Diagnostic Centre Ltd - IPO Note - YES Securities

Consumer Durables Sector - Lockdown mars performance yet again - Institutional Research Desk at HDFC Securities

75% of the employees today want to be in office at least once a week as compared to 52% in October 2020: JLL

Gladiator Stocks - Safari Industries - ICICI Direct

Gladiator Stocks - Interglobe Aviation - ICICI Direct

IPO Review - Ami Organics Ltd - ICICI Direct

Q1FY22 GDP - 31st Aug 2021 - Acuité Ratings & Research

Avanti Feeds - Higher input prices hurt margins - ICICI Securities

Company Update - Restructuring - Aarti Industries - ICICI Direct

Q1FY22 Company Update - MM Forgings - ICICI Direct

Company Update - Arvind Fashions - ICICI Direct

Zomato - Can margins and multiples surprise? - ICICI Securities

Ujjivan Small Finance Bank - Top management change and lumpy provisioning concern to weigh on valuation in near term - ICICI Securities

Bharat Dynamics - Guided missile systems to drive orderbook and profit growth - ICICI Securities

Economy - Continued accommodation necessary despite inflationary risks: MPC minutes - ICICI Securities

InterGlobe Aviation - Annual report analysis: Liquidity management remains the mainstay in anticipation of traffic recovery - ICICI Securities

General insurance - Health remains dominant growth driver; Strong all-round performance by Bajaj Allianz - ICICI Securities

Earnings Wrap Q1FY22: Resilient earnings, limited impact of second Covid wave - ICICI Direct

Fine Organic Industries Results Review - In-line performance - HDFC Securities

Power Plus Sector Update - July witnessed strong ~10% generation growth - HDFC Securities

Information Technology Sector Update - 'Hit Refresh' - HDFC Securities

Maintain ADD on JK Cement - Healthy performance - HDFC Securities

Maintain BUY on Star Cement - Margin recovers on pricing gain - HDFC Securities

Maintain BUY on Sadbhav Engineering - Long road to recovery - HDFC Securities

Poonawalla Fincorp - Business transformation on cards; a turnaround play - ICICI Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020