Nuvama has maintained its ‘Buy’ rating on Balkrishna Industries (BKT) while reducing the target price to ₹3,100 from ₹3,300, citing near-term demand concerns in Europe and the US. The brokerage shared insights from an analyst meet at BKT’s Bhuj plant, highlighting key capacity expansions and long-term growth strategies.
The Bhuj plant currently has a production capacity of 195,000 tonnes per annum (tpa), with surplus space available to expand by another 150,000–200,000 tpa. A new 35,000 tpa capacity addition is expected to become operational in FY26, while the advanced carbon black plant (30,000 tpa) is likely to generate revenues of ₹5 billion within two years. BKT continues to target an ambitious 10% global market share over the medium term, up from its current 6–7% share.
However, the short-term outlook remains subdued due to weak demand from Europe and the US, though BKT is expected to continue gaining market share globally. Nuvama has trimmed its FY26E/27E EBITDA estimates by ~3%, factoring in lower revenue assumptions, but remains positive on the company’s long-term prospects.
