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Informist, Tuesday, Jul. 28, 2026

 

By Upasika Singhal

 

MUMBAI - Balkrishna Industries Ltd. is expected to report healthy revenue growth for the June quarter driven by strong domestic demand, steady replacement demand, and a weaker rupee, according to brokerages tracking the company. However, higher input and freight costs are expected to weigh on margins.

 

Balkrishna Industries' standalone net profit for the June quarter is projected to rise over 17% on year to INR 3.4 billion, according to the average of estimates from 10 brokerages. The highest estimate for Balkrishna's net profit for the June quarter is INR 3.9 billion from Kotak Securities Ltd. and the lowest is INR 2.5 billion from ICICI Securities Ltd.

 

The company's revenues are expected to grow over 11% on year to INR 30.8 billion for the June quarter, according to the estimates. The highest estimate for the June quarter revenues is INR 32.6 billion from Nirmal Bang Equities Pvt. Ltd. and the lowest is INR 29.7 billion from ICICI Securities.

 

The company's volumes are expected to grow 9-10% on year in the June quarter, brokerages said. This will be driven by healthy domestic demand and steady demand from the US and European markets, brokerages said.

 

Balkrishna Industries' earnings before interest, tax, depreciation, and amortisation are expected to fall marginally to INR 6.51 billion for the June quarter from INR 6.55 billion in the year-ago quarter, according to the average of estimates from seven brokerages. The highest EBITDA estimate is INR 6.8 billion by Nirmal Bang and the lowest is INR 6.04 billion from Nuvama Wealth Management Ltd.

 

Margins are expected to be weighed down by operating expenses, advertising spends, and a weak product mix in the newly launched on-highway business, brokerages said. Brokerages expect the EBITDA margin to decline between 170-260 basis points, mainly due to an increase in commodity prices, lower contribution of international sales, higher freight cost, and the launch of its new on-highway business.

 

Higher natural rubber and crude oil prices are expected to compress margins, brokerages said. However, the absence of foreign exchange losses is likely to support net profit growth, Motilal Oswal Financial Services Ltd. said. Balkrishna Industries is expected to report no foreign exchange gains or losses this quarter, against a loss of INR 1.5 billion in the year-ago quarter, the brokerage added.

 

The raw material costs are expected to remain elevated due to continuing global supply chain disruptions, but this inflation is expected to ease by the second half of the financial year, brokerages said. However, if this inflation persists, it could lead to further price hikes to ease the cost of under-recoveries, HDFC Securities said. A sustained rise in crude oil prices could also adversely affect demand for commercial vehicles, JM Financial Institutional Securities Pvt. Ltd. said.

 

Uncertainty over the pending trade deal with the US and the threat of tariffs is expected to weigh on exports to the US, HDFC Securities said. Exports to the US contributed over 13% of the company's sales in both the year-ago quarter and the March quarter. A weaker rupee is expected to partially offset the impact on export realisations, Motilal Oswal said.

 

Investors will watch for the outlook for demand from the replacement sector, demand from the European market, and the cost of raw materials.

Brokerages expect tyre companies with higher domestic exposure to post a weaker quarter due to higher raw material costs. Nonetheless, revenues are expected to increase across the sector due to growth in original equipment manufacturers' sales and volume growth in the replacement and exports segment.

 

Balkrishna Industries Ltd. is an off-highway tyre manufacturer, specialising in over 3,600 stock keeping units. The company specialises in manufacturing tyres for vehicles used in agriculture, construction, mining, quarrying, and transportation. In February, the company announced its re-entry into the on-highway market and introduced purpose-built tyres for two-wheelers and medium and heavy commercial vehicles.

 

Tuesday, shares of the company ended at INR 2,013.20 apiece on the National Stock Exchange, slightly down from Monday. The stock has fallen over 10% since the company announced its earnings for the March quarter. The company will post its financial results for the June quarter Wednesday.

 

Of the nine research reports on the company available with Informist, six have a "hold" recommendation, with an average target price of INR 2,367, which is over 17% higher than the current market price. Two have a "buy" recommendation on the stock with an average target price of INR 2,599. One has a "sell" recommendation, with an average target price of INR 1,919.

 

Following are the June earnings estimates, in INR billion, for Balkrishna Industries Ltd. from 10 brokerages in descending order of net profit estimates:

 

Broking Firm	Net Sales (INR billion)	Net Profit	EBITDA
Kotak Securities Ltd.	30.82	3.92	6.54
Nirmal Bang Equities Pvt. Ltd.	32.62	3.87	6.77
Motilal Oswal Financial Services Ltd.	30.40	3.69	6.70
360 ONE Capital Market Pvt. Ltd.	31.18	3.60
HDFC Securities	30.63	3.55
Nomura Equity Research	30.99	3.55	6.69
Anand Rathi Share and Stock Brokers Ltd.	30.67	3.34
JM Financial Institutional Securities Pvt. Ltd.	31.08	2.93	6.66
Nuvama Wealth Management Ltd.	29.77	2.73	6.04
ICICI Securities Ltd.	29.69	2.53	6.18
Average	30.79	3.37	6.51

 

End

 

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

 

Edited by Pankaj Aher

 

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