Balkrishna must pump up volume
₹900 crore from ₹600 crore estimated earlier. The incremental amount would be spent on setting up a mould manufacturing capacity at Bhuj.
Hereon, investors would follow how Balkrishna navigates the woes of export markets. To be sure, “Balkrishna’s export-oriented business model has strengths of a wide product portfolio with over 3,200 stock keeping units, short lead times for product launches (in-house mould and testing track facility), competitive pricing (12–15% lower than global peers), and a growing distribution network," said a Nuvama Research report dated 23 October.
These strengths have aided growth in the off-highway tyres segment, which is a non-focus area for bigger tyre companies, said the Nuvama report. Balkrishna Industries primarily caters to the off-highway tyres segment.
Notably, the domestic demand is on a firm footing. For now, the scope for meaningful expansion in the stock appears limited as valuations are not exactly cheap.
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