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Informist, Thursday, Oct. 30, 2025

By Adhithya Aji

MUMBAI – Balkrishna Industries Ltd. is expected to report a year-on-year fall in its net profit in the September quarter due to lower margins and weak export volumes. The growth in the India business is seen offset by weakness in overseas markets such as Europe and the US, according to brokerages tracking the company.  

The tyre-maker is expected to post a standalone net profit of INR 3.38 billion for the September quarter, down over 3% on year but up nearly 18% sequentially, according to the average of estimates from seven brokerages. The highest estimate for net profit is INR 3.71 billion by ICICI Securities Ltd. and the lowest is INR 2.59 billion by Anand Rathi Share and Stock Brokers Ltd.

The company's net sales for the reporting quarter are estimated at INR 25.22 billion, up 3.5% on year but down nearly 9% sequentially. The highest estimate for the company's revenue is INR 26.53 billion from Nirmal Bang Equities Pvt. Ltd. and the lowest is INR 23.78 billion from Nuvama Wealth Management Ltd.

The top line of the company is expected to increase 1% on year in the September quarter, according to Kotak Securities Ltd. This is likely led by a 3-4% hike in average selling price due to price increases and favourable foreign exchange movements, Kotak Securities said. ICICI Securities expects revenues to be higher 1% on year led by better realisation.  

Balkrishna Industries' sales volumes are expected to decline due to weak demand in the overseas market, brokerages said. The volumes are expected to decline by 2% on-year to 72,000 tonnes in the September quarter, driven by weak demand for off-highway tyres in the European Union, Kotak Securities said. The high export tariffs led to weak demand in the US, according to Kotak. In the year-ago quarter, the company reported a sales volume of 73,298 tonnes. 

Sales volumes will decline 2% on year because the marginal growth in the India business will be offset by weak sales in the US and Europe, ICICI Securities said. However, HDFC Securities Ltd. expects volumes to rise 4% on year but fall 6% sequentially, as demand in overseas markets remains subdued.

In the June quarter, European sales accounted for over 38% of total sales, and India accounted for 35%. Sales in the Americas accounted for 17% of the total sales volume. 

The company is expected to report earnings before interest, tax, depreciation, and amortisation of INR 6 billion, according to the average of estimates from five brokerages. The lowest estimate for EBITDA is INR 5.66 billion from Nuvama Wealth Management and the highest is INR 6.23 billion from Motilal Oswal Financial Services Ltd.

The EBITDA margin will likely decline 210 basis points on year due to negative operating leverage, tariff pressures in the US market, and weaker geographical mix, Kotak said. ICICI Securities expects the EBITDA margin to contract 60 bps on year to 24.5% due to higher employee expenses and other expenses, which will be slightly offset by a better rate on currency hedges.

However, Motilal Oswal expects the margin to improve 60 bps sequentially. "EBITDA margin to improve 50 bps QoQ (quarter-on-quarter) on the back of easing RM (raw materials) costs and sharp correction in ocean freight costs, though to be partially negated by partial absorption of tariff-related cost increase," HDFC Securities said. In the year-ago quarter, Balkrishna Industries had reported an EBITDA margin of 25.1% and in the trailing quarter, it was 23.8%.

The company will detail its September quarter earnings on Friday. Outlook on demand and margin will be the key variables to monitor, according to Nuvama.

Of the 13 brokerage reports available on the company with Informist, six have a 'sell' call, five have a 'hold' rating and two have a 'buy' call. The average target price for the 'sell' calls is INR 2,350.

The stock is down nearly 14% since the announcement of its June quarter earnings on Jul. 26. Thursday, shares of Balkrishna Industries ended 0.1% lower at INR 2,326.60 on the National Stock Exchange. 

Following are the Jul-Sept earnings estimates for Balkrishna Industries from seven brokerages in descending order of the estimate of net profit in INR million:

End

Edited by Saji George Titus

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