In a spectacular growth in market value, the Balkrishna Industries stock has achieved the feat which no other stock has achieved in the sector. The multibagger stock grew exponentially during the last 16 years and generated immense wealth for its holders in the long term.
If you would have invested Rs 1,00,000 into the stock in May 2002 , the amount would have turned to more than Rs 10 crore in May this year.
In May 2002 , the stock traded at over Rs 1 level and today the share price stands at Rs 1,195 level on BSE.
According to analysts, the firm is the among the most efficient tyre producers in India. This can be attributed as one of the factor behind the meteoric rise in the stock during the last 16 years. Its competitors in the segment are MRF, Apollo Tyres, Ceat, JK Tyre and Industries, Goodyear India, and TVS Srichakra.
The stock has delivered 59.66% returns during the last one year against 22.63% returns generated by sectoral stocks during the same year.
The firm is a leading manufacturer of off-highway tyres, which are used in agricultural, industrial, material handling, construction, earthmoving, forestry, lawn and garden equipment and all-terrain vehicles
The stock is among the favourites of analysts and brokerages getting nil sell calls with consensus recommendations of 'outperform' on Reuters.
According to an ICICI Securities report, net profit of the firm is likely to come at Rs 770.2 crore in FY18 compared with Rs 715.2 crore in FY 17.
Expecting a significant rise, the brokerage house expects net profit to cross the Rs 1,000 crore mark to reach Rs 1,234 crore in FY 20.
The management has maintained its volume guidance of 190,000 MT to 195,000 MT for FY18E.
In Q3 of last fiscal, Balkrishna Industries revenues stood at Rs 1,106 crore (up 25.4% year on year ). This was mainly after volumes grew 22.6% YoY to 49,553 metric tonnes (MT).
The firm posted Q3 profit at Rs 190 crore against Rs 186 crore profit in the same period year ago. Revenue from operations in the quarter ending December came at Rs 1106 crore against Rs 896 crore year ago.
The firm serves both original equipment manufacturers (OEM) and the replacement market. It has four subsidiaries in Europe and North America and sells products in 130 countries worldwide. In India, it has five production sites in Aurangabad, Bhiwadi, Chopanki, Dombivali and Bhuj.