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🧾 Balkrishna Industries Q1 FY26 Result Analysis 🛞

Lesson 175/185 | Study Time: 10 Min

Course: Quarterly Result Updates & Analysis

🧾 Balkrishna Industries Q1 FY26 Result Analysis 🛞

📍 CMP: ₹2,682 | Sector: Tyres & Rubber – Specialty Off-Highway Segment

🧠 1. Key Management Insights & Strategic Highlights

Source: [Investor Presentation, Press Release, and Concall – May 24, 2025]

✅ Strategic Growth Levers:

Vision FY30: Revenue target of ₹23,000 Cr (2.2x from FY25)
3 Levers of Growth:

OHT (Off-Highway Tyres): 70% of FY30 revenue; expanding to 425,000 MTPA
Carbon Black: 10% of FY30 revenue; capacity to increase from 200,000 to 360,000 MTPA
New Tyre Verticals: PCR & CVR for India; targeting 5% Indian market share

🏗 Expansion Projects:

₹3,500 Cr capex over FY26–FY28
Entry into premium Passenger Car Radials (FY27) and Truck Bus Radials (FY26)

♻️ Integration Strength:

Backward integrated carbon black plant with in-house power generation reduces cost volatility.

📊 2. Consolidated Financial Performance (Q1 FY26)

🔸 Income Statement Highlights:

Particulars	Q1 FY26	Q1 FY25	YoY Change	Q4 FY25	QoQ Change
Revenue (₹ Cr)	2,838	2,697	🔼 +5%	2,746	🔼 +3%
Volume (MT)	82,062	82,085	🔁 Flat	82,062	🔁 Flat
EBITDA (₹ Cr)	703	699	🔼 +1%	742* (est.)	🔽 -5%
EBITDA Margin (%)	24.8%	25.9%	🔽 -110bps	27.0%*	🔽 -220bps
Net Profit (₹ Cr)	362	481	🔽 -25%	439	🔽 -18%
PAT Margin (%)	12.8%	17.8%	🔽 -500bps	16.0%	🔽 -320bps

⚠️ Drop in PAT driven by higher finance cost and ₹58 Cr mark-to-market loss.

📉 3. Profitability, Growth & Valuation Ratios

Metrics	Q1 FY26	Q1 FY25	Q4 FY25 (est)
EPS (₹)	18.7	24.9	22.7
ROCE (FY25 full year)	~21%	~20%	—
ROE (FY25 full year)	~16%	~16%	—
P/E (TTM basis)	~31x	~21.1x	—

🏭 4. Industry KPIs – Tyres Sector

🌱 OHT Focus: Maintains global leadership in agri-tires; expanding into mining, industrial, and tracks
🧱 Diversification: Strong traction in rubber tracks, niche mining radials (upto 57”), and advanced carbon black
🚚 New Segment Foray: Passenger and commercial radials in Indian replacement market—currently dominated by players like MRF, Apollo, JK

📈 5. FY26 Outlook Based on Trend & Estimates

🔍 Growth Momentum from FY25:

Metric	Q1 FY25	H1 FY25	9M FY25	FY25
Sales Growth	26%	16%	15%	12%
Profit Growth	20%	23%	31%	13%
PAT Margin	18.4%	16.3%	16.7%	15.8%

📌 Near-Term View (Q2–Q3 FY26):

Volume likely flat to marginally up
Margins could stabilize near ~24–25%
Global macros and geopolitical tensions remain key risks

🔭 Long-Term View (FY26–FY30):

Expected CAGR of 4% in revenue
Margins to stabilize at 13.5% post full commercialization of expansions, Profits may fall this year.
Strong return ratios to sustain with in-house carbon black and premium niche positioning

🧐 6. Conclusion for Long-Term Investors

✅ Key Positives:

Market leadership in OHT with diversified global presence 🌍
Robust expansion in high-margin adjacencies (carbon black, rubber tracks) 🔧
Healthy cash flows, debt-light balance sheet 💰

⚠️ Key Risks:

🔻 Drop in Q1 PAT due to non-operating losses
Global macro & trade uncertainties affecting visibility
Execution risks in new passenger/commercial tire verticals

📌 Investment View: Cautiously Optimistic

Balkrishna remains a fundamentally strong export-oriented player with a long-term roadmap to double revenues and maintain margins. However, investors should watch short-term volatility in margins and profit due to external factors.

📢 Disclosure

"This analysis is provided solely for informational purposes and does not constitute investment advice. Investors should perform their own due diligence before making investment decisions."

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Piyush Patel

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