Balkrishna Industries Limited (BKT) is an Indian multinational tyre manufacturing company based in Mumbai, India. Balkrishna Industries manufactures off-highway tyres used in specialist segments like mining, earthmoving, agriculture, and gardening in five factories located in Aurangabad, Bhiwadi, Chopanki, Dombivali, and Bhuj. In 2013, it was ranked 41st among the world’s tyre makers.
Balkrishna Industries Limited started its Off-Highway tyre business in 1987. For over 30 years, BKT has successfully focused on specialist segments such as agricultural, construction and industrial as well as earthmoving, port and mining, ATV, and gardening applications.
The company is a leader in the off-highway tire market for a number of specialised industries, including agriculture, constructing, earthmoving, ports, and mining.
Quarterly Earnings Walkthrough
Balkrishna Industries has reported a net profit for the December quarter at Rs 108 crore versus Rs 339 crore in the same quarter of the last year, which is a sharp decline of 68%. Balkrishna Industries reported their revenue from operations at Rs 2166 crore in the quarter ended December 2022 compared to Rs 2046 crore during the same quarter ended of the previous year, which is a growth of 6%. The company has drawn out net expenses of Rs 2060 crore in Q3FY23 against Rs 1709 crore in the previous year quarter. The EPS of Balkrishna Industries has been computed at Rs 5.61 in Q3FY23 as compared to ₹17.53 in the same quarter last year.
The management reported that the channel inventory clearance in end markets has made an impact on its volumes in the December quarter. They added that the company’s distribution channel across the globe had excess inventory in off-highway tires and other tire segments. Inventory at the dealer level is currently at two-and-half months versus nearly three months in the September quarter. The management plans to clear the backlog in the coming 2 months. The company is ameliorating each month, the company has to face the problem of de-stocking in Q4. Sequential volume growth in the April quarter might be in low-single digits.
Declaration of Dividend
The Board has declared 3rd Interim dividend of 200% at Rs. 4.00 per Equity Share (200%) on the Equity Shares of Rs. 2/- each (face value) for the financial year 2022-23 and the payment thereof shall be credited/dispatched within 30 days from the date of declaration as per applicable provisions of Companies Act, 2013, to such shareholders as on Record Date i.e., 18th February, 2023
Balkrishna Industries stock price has plummeted down from its record highs. The stock made a recovery but faces severe resistance at the 38.2% retracement level. Currently the stock is taking support on the 23.6% retracement level. Considering the quarterly performance of the company, the price will face continued pressure on the upside. There have been multiple days when the stock price was being manipulated with frequent upper circuits followed by lower circuits which can be observed on the daily chart. Traders and investors should avoid this stock.
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