EV stock jumps after company announces its Q1 FY26 results
Tuesday, Balkrishna Industries Ltd (NSE:BLKI). (BIL:IN) received a favorable update from Nomura/Instinet, with analyst Siddhartha Bera upgrading the stock from Neutral to Buy. The firm has set a price target for the company at INR 3,242.00, maintaining its previous level.
Bera's upgrade is based on the company's potential for steady market share gains in the global Off-Highway Tire (OHT) segment. Balkrishna Industries has historically traded within a 14-20 times EV/EBITDA range. The analyst anticipates earnings growth, driven by a stronger upcycle expected in the second half of the fiscal year 2026, and maintains an 18 times target EV/EBITDA on fiscal year 2027 forecasts, which is near the higher end of the historical trading range.
The company's current valuation, at approximately 14 times FY27F EV/EBITDA, is deemed attractive by Nomura/Instinet, especially considering Balkrishna Industries' strong Return on Invested Capital (ROIC) of about 25% in the fiscal years 2026 and 2027 before taxes. This financial metric underpins the analyst's decision to upgrade the rating to Buy.
Nomura/Instinet's analysis acknowledges the risk that macroeconomic uncertainty could impact the expected demand recovery for Balkrishna Industries. Yet, the firm's current valuation and strong financial outlook provide a basis for the positive rating. The price target of INR 3,242.00 remains unchanged, reflecting the analyst's confidence in the company's future performance.
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