Balkrishna Industries Crashes 10% On Price Target Cuts, Expansion Concerns; Key Points
Shares of Balkrishna Industries Ltd plunged over 10% following a wave of price target downgrades by brokerages; Check latest target price
Balkrishna Industries Share Price Today: Shares of Balkrishna Industries Ltd plunged over 10% in Monday's trade following a wave of price target downgrades by brokerages. The declines came amid continued concerns over demand uncertainty and the company's expansion into new tyre segments — particularly the Premium Passenger Car Radial (PCR) and Truck and Bus Radial (TBR) categories — which analysts believe could weigh on return on equity (ROE) in the short term.
The stock hit an intraday low of Rs 2,385, down 10.33%, and has now dropped 15.82% year-to-date in 2025, underperforming the BSE Auto index, which is up 2.12% in the same period.
In terms of financial performance, Balkrishna's Q4FY25 revenue beat Bloomberg estimates by 4%, while EBITDA margin stood at 24.8%, just shy of the consensus 25% estimate. EBITDA remained flat year-on-year, slightly above expectations.
According to Nomura India, Q4 volumes were 82,000 tonnes, unchanged year-on-year, while average selling prices (ASPs) rose 2.7% quarter-on-quarter. However, the bottom line disappointed due to lower other income and higher interest expenses, resulting in a 25% year-on-year decline in PAT.
Nomura downgraded the stock from 'Buy' to 'Neutral', citing concerns over the potential ROE dilution from its diversification into new tyre segments. It revised the target price upward to Rs 3,242 from Rs 2,644 earlier, factoring in the medium-term potential but also noting execution risks.
Motilal Oswal Financial Services (MOFSL) also flagged ongoing demand headwinds in Balkrishna's key export markets. The brokerage cut its FY26 and FY27 earnings estimates by 8% each, and expressed skepticism over the company's entry into the niche PCR and TBR segments.
'Whether Balkrishna can gain meaningful market share in these new categories without significantly diluting margins and returns remains a key uncertainty," MOFSL noted. While the stock's valuations are no longer demanding, future re-rating would hinge on execution success, it said.
Meanwhile, Nirmal Bang Institutional Equities maintained a 'Hold' rating on the stock, trimming its target price to Rs 2,645 from Rs 2,718. The brokerage said it continues to project a 9% volume CAGR over FY25–FY27, with margins improving to 26.2% by FY27. Despite near-term concerns, it believes Balkrishna remains a strong franchise, and its low-cost operations and geographic marketing efforts could drive superior long-term margins.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
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