BALKRISIND - Balkrishna Industries Ltd. Share Price

Balkrishna Industries Ltd. has set an ambitious five-year strategic plan targeting revenue of approximately INR 23,000 crores by 2030. Management outlined three key growth levers:

1. Off-Highway Tires (OHT): The company aims for OHT to contribute 70% of this revenue. They plan to maintain global leadership in the agricultural tire sector and enhance their presence in mining and industrial tires. Current production capacity stands at 360,000 metric tons per annum, with an expansion plan to reach 425,000 metric tons. They are targeting a market share of 8% globally, with aspirations to achieve 10% under favorable economic conditions.

2. Carbon Black: This segment expects a 10% contribution to enhanced revenue from third-party sales by 2030. Management has approved an expansion of the carbon black plant from 200,000 to 360,000 metric tons per annum, alongside a 24-megawatt co-generation power plant. This expansion, set for completion by early 2026, aims to leverage synergies with tire operations.

3. New Tire Verticals for India: The company plans to enter the premium passenger car and commercial vehicle radial tire segments, targeting 20% contribution to overall sales by 2030. Initial launches are set for Q4 of FY26, with a projected 5% market share in India and tapping into an addressable market worth INR 80,000 crores.

For capital expenditure, a total of INR 3,500 crores is planned over three years, focusing on these growth areas, while estimated spending for FY26 is between INR 1,000 to INR 1,500 crores. The company aims to maintain an EBITDA margin of 23% to 25% post-commercialization, despite potential challenges from market dynamics and geopolitical issues.

In FY25, they reported a stand-alone revenue of INR 10,615 crores (13% growth), with a Q4 revenue of INR 2,838 crores (5% growth). Profit after tax for FY25 reached INR 1,628 crores, also reflecting a healthy overall performance despite global uncertainties.

Here are the major questions and answers from the Q&A section of the earnings transcript:

1. Siddhartha Bera: "What gives us the confidence of winning in new segments, considering the competition?"

   • Satish Sharma: "Our strategy is influenced by our proven success in the agriculture segment over the last 5 years. The growing Indian economy provides a solid foundation for our expansion into the commercial vehicle segment, backed by our all-steel radial technology."

2. Siddhartha Bera: "Will investments in brand visibility change with new segments?"

   • Rajiv Poddar: "We plan to maintain our current investment levels. As revenues grow over this five-year journey, the percentage spent on branding will decrease, yielding cumulative benefits."

3. Siddhartha Bera: "What is the split of the INR3,500 crore capex?"

   • Rajiv Poddar: "We currently do not have a breakdown as the budget was just approved. However, we anticipate spending INR1,000 to INR1,500 crores in FY '26."

4. Arjun Khanna: "What capacities are we targeting for the pilot plants of PCR and TBR?"

   • Satish Sharma: "The TBR will utilize our existing mining capacity for an early entry. The capacities for PCR are still being worked on, and will focus initially on the domestic market."

5. Arjun Khanna: "Do you provide FY '26 volume guidance?"

   • Rajiv Poddar: "We can't offer guidance due to the global scenario's volatility. As for specialty carbon black, it's still in the trial phase and will take time to scale."

6. Basudeb Banerjee: "What is the inventory situation at the distributor level?"

   • Rajiv Poddar: "Inventory is stable at desired levels."

7. Basudeb Banerjee: "How do you view the profitability of being a marginal player in a growing market?"

   • Satish Sharma: "Our plan will evolve based on market response and we expect a robust response to our entry strategies, ensuring profitability."

8. Raghunandan: "Can you clarify current tariffs impacting exports vs competitors?"

   • Ravi Joshi: "We are sharing the tariff burden partly with customers to mitigate the 10% tariff impact."

9. Lokesh: "What assurance can you give about maintaining margins despite increased competition?"

   • Rajiv Poddar: "Our focus on niche products and competitive advantages positions us well to maintain blended margins of 23-25% in the long term."

Each answer stays under 500 characters and captures the essence of the discussions during the Q&A.