We recommended Balkrishna Industries because Balkrishna had over the years established itself as an off-highway specialist. Balkrishna manufactures replacement tyres for use of vehicles in agriculture, mining and construction, among others. A huge international base of exports to over 120 countries sees the company deriving over 91 per cent of its revenues from outside the country.
Balkrishna has cut its volume guidance to 1,55,000-1,60,000 tonne from an earlier guidance of 1,60,000-1,65,000 tonne and indicated it was more likely to meet the lower end. Balkrishna has carved a niche for itself in the off-highway tyre segment and has captured close to 4 per cent share in the global market. According to channel checks undertaken by Espirito Santo Research, Europe, which accounts for 53 per cent of Balkrishna's top line, has seen growth pick up sequentially in the last few months across all euro countries (except for France and Spain) where Balkrishna is present. US, which brings in 19 per cent of Balkrishna's revenues, is expected to see higher demand in Q1-Q2CY15 in comparison with last year. Hold.
Gain of 112 per cent at market price of Rs 618. Recommended in January 2013 at ₹291.