The shares of prominent tyre manufacturers fell up to 10 percent in today’s trading session after the well-known brokerage firm downgraded to “neutral”. With a market capitalization of Rs 47,032.14 crore, the shares of Balkrishna Industries Ltd were trading at Rs 2,432.90 per share, decreasing around 8.53 percent as compared to the previous closing price of Rs 2,659.85 apiece.
Brokerage Recommendations
Nomura, one of the well-known brokerages globally, has downgraded to a ‘neutral’ rating from “Buy” on this tyre stock and slashed its target price to Rs 2,644 apiece from Rs 3,242 apiece, still indicating a potential upside of 8 percent from Monday’s price of Rs 2,448.95 per share.
Nomura notes that Balkrishna Industries may face higher initial investments to expand distribution and brand presence in new segments. This could reduce blended EBITDA margins to 22–23% and lower Return on Equity by up to 200 basis points, depending on the product mix and execution strategy.
Nomura maintains its FY26/27 earnings estimates for Balkrishna Industries but lowers the expected valuation multiples to 12x and 16x from 14x–18x. This revision reflects concerns over potential return dilution as the company enters lower-margin, highly competitive markets, which could impact overall profitability despite steady earnings projections.
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Looking forward to the company’s financial performance, revenue jumped by 3 percent from Rs 2,682 crore in Q4FY24 to Rs 2,752 crore in Q4FY25. During the same period, net profits decreased by 24 percent from Rs 487 crore to Rs 369 crore.
Balkrishna Industries targets 2.2x revenue growth by FY30, reaching ~Rs. 23,000 crore from ~Rs. 10,600 crore in FY25, driven by a ~17% CAGR. Growth will come from OHT segments (~70%), new tire categories for the Indian market (~20%), and third-party carbon black sales (~10%).
Balkrishna Industries Limited is an India-based company that is engaged in the business of manufacturing and selling off-highway tires (OHT) in the specialist segments, such as agricultural, industrial and construction, earthmovers and port, mining, forestry, lawn and garden, and all-terrain vehicles (ATV).
Written by Abhishek Singh
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