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On Monday, Citi analysts revised their price target for Balkrishna Industries Ltd (NSE:BLKI). (BIL:IN) to INR2,400, a decrease from the previous INR2,450, while keeping a Sell rating on the stock. The analysts noted that the company’s fourth-quarter results for the fiscal year 2025 fell short of expectations, citing lower volumes and margins. Balkrishna Industries, known for its off-highway tire (OHT) products, faces an uncertain demand outlook influenced by the current geopolitical tensions and tariff worries.
The management of Balkrishna Industries has set an ambitious five-year goal to achieve revenues of Rs230 billion by the fiscal year 2030, which would represent a compound annual growth rate (CAGR) of 17%. This target is expected to be met through the expansion of OHT capacity, increased revenue from specialty carbon black, and diversification into new segments such as Passenger Car Radials (PCR) and Truck and Bus Radials (TBR).
Despite these growth plans, Citi analysts expressed caution regarding the company’s move into the PCR and TBR markets. They pointed out that the strategies required for sales, distribution, marketing, supply chain, and customer relationships in these new segments differ significantly from those in the OHT segment. The analysts believe that there are production-related synergies with Balkrishna Industries’ existing business, but they remain wary of the company’s foray into these new areas at this time.
The revised price target of INR2,400 reflects a change in the valuation period to September 2026 estimates from March 2026, while maintaining a target price-to-earnings (P/E) multiple of 22x. The adjustment by Citi comes after a detailed analysis of Balkrishna Industries’ latest financial performance and strategic direction amidst a challenging external environment.
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