CIMB Securities initiates buy on Balkrishna Industries, target price Rs 998

CIMB Securities has initiated coverage on Balkrishna Industries in the long term with an add rating and target price of Rs 998. The stock ended down 1.6% at Rs 849 on Monday while the BSE Sensex closed 72.50 points down at 40,284.19.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 1084.28 crore, down -9.56% from last quarter sales of Rs 1198.93 crore.The company has reported net profit after tax of Rs 294.31 crore in the latest quarter.


Investment Rationale

The brokerage has initiated coverage given its superior return on capital employed, high operating profit margin and strong sales volume growth compared to global and domestic peers. The brokerage estimates an EPS CAGR of 15% over FY21-22, higher than its 12% EPS CAGR over the last 3 years.