Nomura upgraded Balkrishna Industries (BKT) to buy from neutral, with a revised target price of Rs 3,242, citing the company’s potential to benefit from a demand recovery and strategic diversification. For Q3 FY25, BKT reported a 5% YoY increase in volumes to 76,343 tonnes compared to 72,749 tonnes in the same period last year. Revenue grew 11% YoY to Rs 2,541 crore, while EBITDA increased 9% to Rs 589 crore, reflecting operational resilience. However, the EBITDA margin came in slightly lower at 23.2% versus 23.6% in Q3 FY24, mainly due to subdued demand conditions in key markets.
Profit after tax rose sharply by 42% YoY to Rs 439 crore, aided by other income, which grew significantly to Rs 187 crore from Rs 66.5 crore in Q3 FY24. Nomura highlighted that the company’s efforts to expand into the off-the-road (OTR) and US markets, along with stable channel inventory, will support long-term growth. While macro challenges remain, BKT’s ongoing senior management hires and focus on key markets like India and the US are expected to drive recovery starting in FY26.
