Buy Balkrishna Industries, target price Rs 2047: ICICI Securities

ICICI Securities has buy call on Balkrishna Industries with a target price of Rs 2047. The current market price of Balkrishna Industries Ltd. is Rs 1710.35.

Balkrishna Industries Ltd., incorporated in the year 1961, is a Large Cap company (having a market cap of Rs 33671.02 Crore) operating in Tyres sector.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 1577.90 Crore, up 67.40 % from last quarter Sales of Rs 942.61 Crore and up 45.53 % from last year same quarter Sales of Rs 1084.28 Crore Company reported net profit after tax of Rs 340.94 Crore in latest quarter.

Investment Rationale
The brokerage expects strong FCF generation of ~Rs28bn over FY22E/FY23E. It rolls over into FY23E, maintain the valuation multiple at 24x FY23E EPS of Rs 85, and revise the target price to Rs 2,047 (earlier: Rs1,969).

Promoter/FII Holdings
Promoters held 58.3 per cent stake in the company as of Dec 30, 2020, while FIIs held 15.5 per cent, DIIs 15 per cent and public and others 11.2 per cent.