Balkrishna tyres, good numbers, Sales growth 15%-17%, value compoundinng 15%. Company makes tyres called OHT- off highway tires which are used in agriculture, industrial, construction, earthmoving, mining, port, lawn and garden and all-terrain vehicle tires. It operates into a segment known as “large varieties - low volume segment”. *This segment is neither exposed to any technological obsolescence nor wild fluctuations in demand for its products.*In FY22, nearly 66% of the revenue was derived from the agricultural segment.In FY22, nearly 69% of the revenue was derived from the replacement segment.The replacement segment generally offers higher margins.

In FY21, the company had announced capex of ₹1,900 crore over FY22 and FY23. Capex plans are likely to complete in FY 23. Post commissioning of these capacities total capacity profile of 3,60,000 MTPA. For FY23, target sales volume is 3,30,000 MT. FY 22 sales were 2,88,795 MT. So there is probability of sales increase due to capex completion. Currently, the company continues to enjoy around 5.5% market share in the global specialty market, which is expected to increase over the next four to five years through capacity expansion and more penetration in global markets.*This means there is huge run way ahaead of the company.*

*The company has robust operating margins due to the backward integration of carbon black.* Backward integration of carbon black not only helps in reducing the input cost but also transportation cost. In FY22, although the margin deteriorated due to commodity inflation, high power and freight costs; it continued to be strong at 26.40%.

*50% of sales dependent on Europe, probably these fears has been incorporated in the current market price.Valuation is decent enough as of now.* Company’s guidance for FY23 remains positive. Company has been grappling with the raw material price increase and logistics price increase, which it expects to get relief in coming quarters. Once the situation becomes normal either the raw material price comes down or the company is able to pass the increased cost to the customer and new CAPEX plants are commissioned, the operating margins should increase. Given the past history, it is likely that the company will be able to tide through this Overall the company is growing organically and looks good company to invest in for a long time.