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Informist, Monday, Jan. 27, 2025

By Akshay V. Johnson

MUMBAI – Balkrishna Industries Ltd. said it is confident of achieving minor growth in sales volume for the current financial year ending March, re-iterating its earlier guidance for the year. For Apr-Dec, the company's volumes were 233,211 tonnes, up 11% on year. A strong product profile, backed by brand investments, led the company to report a slight growth in sales volume for the December quarter, the management said during a post-earnings analyst conference call Monday. 

The company is undergoing testing for its advanced carbon black material, used in plastics, ink, and the paint industry, after the completion of its 30,000-tonne-per-annum capacity plant in September. In August, the company had announced a capital expenditure to set up a 35,000-tonnes-per-annum capacity plant for manufacturing off-the-road tyres. The first phase of this capital expenditure is progressing as scheduled, and it will be completed in the first half of 2025-26 (Apr-Mar), the management said.

Also, the management expects the FY25 capital expenditure to be around INR 11 billion-INR 12 billion, up from its guidance of INR 8 billion-INR 10 billion for the year. For Apr-Dec, the company's capital expenditure was INR 9.68 billion. 

The scenario in Europe, a key market, continues to be weak. This region accounts for nearly 43% of its sales in Apr-Dec. However, markets in the Americas and India have improved in the latest quarter. The management believes the Americas will show tremendous growth and expects volume to be scaled up in the coming years. 

For the December quarter, the company's employee costs increased 10% sequentially to INR 1.31 billion. The management attributed the rise in employee costs as the company had to appoint staff for the new plants. 

The company's management said it has not taken any price hikes in the December quarter as well as in the March quarter so far. It had indicated an increase of 100-200 basis points in raw material costs to impact margins and a majority of this spike in input costs is expected in the March quarter.

The company's market share in the Indian tyre market is around 6-7%, the same as that of its off-highway segment. The agriculture segment's market share is closer to 10%, the management said. As of now, Balkrishna Industries is not planning to expand into the domestic tyre sub-segment, the management said.

The Mumbai-based company released its quarterly results on Saturday. Its net profit rose over 41% on year to INR 4.39 billion for Oct-Dec, beating the average of analysts' estimates of INR 3.85 billion. Its revenue of INR 25.41 billion for the December quarter was up 11.4%, also beating the Street's estimate of INR 25.13 billion by a slight margin. At 1322 IST, shares of the company traded at INR 2,575 on the National Stock Exchange, down 2.9% from the previous close. The stock has fallen in the last four weeks, declining over 7% during that period.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Tanima Banerjee

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