Categories Concall Highlights, Earnings, Industrials

Balkrishna Industries Ltd Q2 FY24 Earnings Conference Call Insights

Key highlights from Balkrishna Industries Ltd (BALKRISIND) Q2 FY24 Earnings Concall

  • Financial Results and Performance
    • Revenue INR2247 crore, EBITDA INR548 crore with 24.4% margin, PAT INR335 crore.
    • For H1, 45% sales from Europe, 29% from India, 17% from Americas.
    • Q2 faced challenges due to heatwaves and recessionary fears in export markets.
    • Inventory-related challenges normalized, but confidence in distribution channels is still moderate.
    • India market continued to perform relatively better.
    • Q2 volumes partly from inventory created in June that couldn’t be shipped due to disruptions.
    • Expect stable volumes but de-growth in FY24 due to H1 challenges.
    • Operating margins declined due to higher employee expenses, power and fuel costs, and other expenses.
    • Profitability was impacted by inflationary pressures on costs as well as muted growth.
  • Capex and Expansion
    • Planned capex of INR600 crore for FY24, with INR 250-300 crore for maintenance.
    • Decided to set up new mould plant at Bhuj instead of expanding Dombivali plant.
    • New plant at Bhuj a standalone project with capex of INR300 crore and is to be commercialized by end of Q1 FY25.
    • Total FY25 capex now at about INR 900 crore.
    • Advanced Carbon black project to be commissioned in H2FY24.
    • Carbon black project to generate INR400-600 crore revenue at full capacity.
  • Demand Environment
    • Seeing gradual recovery in Europe, but uncertainty due to geopolitics.
    • Strong growth continuing in India across agri and OTR segments.
    • Overall global demand likely to decline marginally in FY23.
  • Capacity Expansion
    • Brownfields allow faster implementation in 15-18 months.
    • To support new products like large OTR and solid tires.
    • No immediate need seen given utilization levels.
    • Truck and bus radial capacity expansion is underway and expected to be completed by Q4 FY23.
  • Market Share
    • Current share is 4-5% globally and in India.
    • Aiming to increase it to 10% over time in India in the medium term.
    • Has strong presence in regions like Punjab and Haryana and working to increase presence and market share in other regions as well.
    • Growth to come from new products like solid tires and tracks.
    • Entered two-wheeler segment this year, received good response from OEMs.
    • Expects international markets to pick up in H2 FY24.
  • Pricing Actions and Margin Outlook
    • Raw material costs likely to remain stable or see minor increases.
    • Continuing to take price hikes to offset commodity cost inflation.
    • Have not taken any price hikes this quarter due to lag effect of RM price changes.
    • Will reconsider price hikes if there are sharp RM price movements.
    • Taking actions to maintain EBITDA margin between 26-28%.
    • Expect margins to remain sustained at current levels.
  • International Markets
    • International markets facing headwinds from geopolitical tensions and uncertainty.
    • Performance in Americas and rest of the world has been declining over the past few quarters.
    • Company waiting to see how international markets progress before providing clarity.

Most Popular

Cochin Shipyard Ltd (COCHINSHIP) Q4 FY22 Earnings Concall Transcript

Cochin Shipyard Limited (NSE:COCHINSHIP) Q4 FY22 Earnings Concall dated May. 26, 2022 Corporate Participants: Madhu S Nair -- Chairman & Managing Director Jose V J -- Director Finance Analysts: Vastupal Shah

All you need to know about Antony Waste Handling Cell in one article

Can you guess the name of the company that was listed during the IPO frenzy in 2020 and is the second largest player in the Indian municipal waste management industry?

Demystifying the Leading Non-Ferrous Recycling Company of India

“Hey, how is the market doing today?” “Oh!, its falling tremendously since morning” I am sure news like these might be a common topic of discussion for you nowadays. Interestingly,