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Balkrishna Industries skids 10% following Q2 earnings disappointment

SI Reporter/Mumbai 06 Nov 18 | 09:53 AM

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Shares of Balkrishna Industries have fallen 10% to Rs 967 per share on the BSE in early morning trade after the company's standalone EBITDA (earnings before interest, tax, depreciation and amortization) margin declined 430 bps at 27.7% in September quarter (Q2FY19) from 32.0% in Q2FY18.

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The tyre company reported 10% year-on-year (Y-o-Y) growth in its standalone net profit at Rs 2.22 billion in Q2FY19. It had a profit of Rs 2.03 billion in a year ago quarter.

Operational revenue during the quarter under review grew 19% at Rs 13.25 billion over the previous year quarter.  Other income rose four-fold at Rs 444 million from Rs 100 million during the quarter.

The company’s revenue and 13.5% Y-o-Y volume growth in line with analyst estimate.

EBITDA (earnings before interest, tax, depreciation and amortization) margin declined 430 bps at 27.7% in Q2FY19 from 32.0% in Q2FY18.

Kotak Securities expected EBITDA margin to be largely flattish QoQ (down 300 bps YoY). The benefit of recent euro appreciation versus rupee will come only in FY2020 as the company is largely hedged for the next three quarters, the brokerage firm said had said in an earnings preview

The stock was trading 10% lower against its 52-week low of Rs 871 touched on November 8 last year. It slipped 34% from its 52-week high of Rs 1,467 on August 29, 2018.

At 09:49 am; Balkrishna Industries was trading 9.3% lower at Rs 970, as compared to 0.43% rise in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 1.42 million equity shares changed hands on the BSE and NSE so far.

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