Branded tyre sales grew eight per cent in FY16, prompting many firms to launch new brands across the price spectrum
Balkrishna Industries surged 13% to Rs 1,225 on the BSE in intra-day trade in otherwise subdued market on back of heavy volumes. The stock of tyre manufacturer is trading close to its record high of Rs 1,280 touched December 2, 2016 in intra-day after reported a robust set of numbers for the quarter ended September 2016 (Q2FY17).
Till 10:50 am; a combined 399,916 equity shares have already changed hands on the counter against an average sub 50,000 shares that were traded daily in past two weeks on the BSE and NSE.
Balkrishna Industries had posted more than doubled its net profit at Rs 243 crore in Q2FY17 against Rs 106 crore in the same period last year. EBITDA (earnings before interest, tax, depreciation and amortization) margin expanded 130 basis points to 32.5% compared to 31.2% last year.
In H1FY17 (April-September), the company recorded volume growth at 16% year on year to 85,855 MT.
The company expects volume growth to improve to 160-170k in FY17 owing to strong demand from across geography and increasing utilization level of Bhuj plant.
“On the back of the strong 21% volume growth reported in Q2FY17, we expect growth volume growth to be around 17% this quarter. Margins are expected to moderate given the increase in rubber prices,” Edelweiss Securities said in a quarterly preview.
Meanwhile, other tyre stocks like MRF, Ceat, Apollo Tyres, Goodyear India and TVS Srichakra were up in the range of 1% to 2% on the BSE, as compared to 0.16% decline in the S&P BSE Sensex.