{"id":1947,"date":"2024-01-04T21:58:27","date_gmt":"2024-01-04T16:28:27","guid":{"rendered":"https:\/\/indiastockguru.com\/?p=1947"},"modified":"2024-01-19T06:29:47","modified_gmt":"2024-01-19T00:59:47","slug":"indian-markets-support-growth-for-balkrishna-industries-in-q2fy24","status":"publish","type":"post","link":"https:\/\/indiastockguru.com\/index.php\/2024\/01\/04\/indian-markets-support-growth-for-balkrishna-industries-in-q2fy24\/","title":{"rendered":"<strong>Indian Markets support growth for Balkrishna Industries in Q2FY24<\/strong>"},"content":{"rendered":"\n<p><\/p>\n\n\n\n<p>Balkrishna Industries is a leading player in the global off highway tyre market. The off-highway tyres (OHT) are used in specialist sectors, including the agricultural, construction, earthmoving, port and mining industries. Balkrishna Industries (BKT) has 4-5% of market share globally. BKT tyres are sold in over 160 countries through distribution networks in the Americas, Europe, India and Rest of the World. Over the past four quarters, BKT\u2019s topline has been in a muted negative zone. In Q2FY24, BKT reported 15% YoY fall in revenues and net profit declined 9% YoY. Revenue from operations came in at Rs 2,253 crore in September Quarter 2023 compared to Rs 2,658 crore in the same period previous year.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-us.googleusercontent.com\/TiAKiM1hRkWSGoKA7Qxft-a91cFOuCY6JgPDOkunFLdakgkpYZQQX4oGIHjKfQD45JM_2tuWUZp-Y-U2XXoRZGtIRt0Ib7PYnHU-JCiBv9wKqpFeLWwxkTYRQc_jHp-omYACuofF962s4L2mXpBI92k\" alt=\"\"\/><\/figure>\n\n\n\n<p>Speaking on lower Q2FY24 performance, Rajiv Poddar, Managing Director at Balkrishna Industries said, \u201cIn Q2FY24, we faced challenges on account of heat waves and recessionary fears in the export market. While the inventory-related challenges in the international markets have normalized, the confidence levels in distribution channels is moderate, leading to gradual and slow improvement.<strong>\u201d <\/strong>Volumes fell 10.5% YoY to 70,585 MT in September Quarter 2023. Even with volume contraction and lower revenue base, operating margins expanded more than six percentage points YoY in Q2FY24. Operating margins came in at 23.6% in September Quarter 2023 aided by lower raw material cost. The management intends to maintain margins in the range of 26-28%.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-us.googleusercontent.com\/vOGkqdtjxZXvGund_kvx32BCG224kK5bjz21vi1JgIRVrsf5thqWrBKc7-UCcdZODyIEQniDP7K6iuPqIVw17UzxcjbosvaevDqQnaPsNYWIJ0t5Xcwt7cGHz3cINVGpG4J9w1Mda4xLpL3OhOB9NWQ\" alt=\"\"\/><\/figure>\n\n\n\n<p><strong>Growth Shifts to Domestic Market, Aspires 10% Market Share<\/strong><\/p>\n\n\n\n<p>BKT\u2019s volume segmentation on geographical basis witnessed strong gains&nbsp; for the domestic Indian market in H1FY24. Europe dominates with 45% of volume contribution followed by India at 26.5%, Americas at 17% and balance came from the rest of the world at 9.7% in first half of FY24. Europe has lost four percentage points and India gained more than eight percentage points YoY in H1FY24 as America\u2019s volume share dropped from 20% in H1FY23 to 16% in H1FY24. BKT\u2019s market share in India is similar to its global market share of 4-5%. Speaking on strong Indian market growth, Poddar said, \u201cThere is a huge opportunity in India with the government spending on construction, infra development, and agriculture. We are amongst the largest economies for agriculture, so there is a lot of scope over here.\u201d He further added that higher focus on Indian markets has resulted in strong growth every year from India. Poddar said that irrespective of labor arbitrage, BKT is getting similar realization from Indian markets and overseas.&nbsp; The company aspires to reach 10% market share both for global and Indian markets.&nbsp;&nbsp;<\/p>\n\n\n\n<p><strong>Waiting for Europe Revival, expansion in Bhuj<\/strong><\/p>\n\n\n\n<p>Europe contributes around 45% of BKT\u2019s total volume mix. According to the management, the worst is over for European markets and revival is on the cards. \u201cSo we believe the worst is over, but with the new geopolitical scenario, there is again doubt of uncertainty cast over the end users and distributors\u201d, said Poddar. The management is positive that the European OTR market will revive in the near future. While volume growth is eagerly awaited from Europe, BKT is moving on with a strong capital expenditure (capex) plan. The capex plan for FY24 is around Rs 600 crore. Apart from maintenance capex of Rs 250-300 crore, the company is setting up a new mould manufacturing plant at Bhuj. Mould capex is earmarked for Bhuj which contributes 60% of BKT\u2019s production. Speaking in Bhuj capex, Poddar said, \u201cIt&#8217;s basically for our new moulds and new growth aspirations. So to keep that in-line, we will be going on new SKUs, solid tyres, bigger OTR tyres, the tracks. So we&#8217;ll be making all those SKUs, so we need the back end for that.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Balkrishna Industries is a leading player in the global off highway tyre market. The off-highway tyres (OHT) are used in specialist sectors, including the agricultural, construction, earthmoving, port and mining industries. Balkrishna Industries (BKT) has 4-5% of market share globally. BKT tyres are sold in over 160 countries through distribution networks in the Americas, Europe, [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":1948,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","om_disable_all_campaigns":false,"_mi_skip_tracking":false},"categories":[3],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Indian Markets support growth for Balkrishna Industries in Q2FY24 - Indiastockguru<\/title>\n<meta name=\"description\" content=\"Indian Markets support growth for Balkrishna Industries in Q2FY24\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/indiastockguru.com\/index.php\/2024\/01\/04\/indian-markets-support-growth-for-balkrishna-industries-in-q2fy24\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Indian Markets support growth for Balkrishna Industries in Q2FY24 - 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