Balkrishna Industries (502355) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 sales volume grew 24% year-over-year to 83,570 MT, with revenue up 30% to Rs. 2,741 crore, aided by a low base from last year's disruptions.

• EBITDA increased 47% year-over-year to Rs. 714 crore, with margin expansion to 26.04%.

• Net profit rose 53% year-over-year to Rs. 477 crore, and an interim dividend of Rs. 4 per share was declared.

• Despite strong Q1, macro challenges such as US recession fears, geopolitical sanctions, inflationary raw materials, and high freight costs are expected to result in tepid demand for the rest of the year.

• Continued focus on ESG, with increased renewable energy usage and membership in the Global Platform for Sustainable Natural Rubber (GPSNR).

Financial highlights

• Q1 standalone revenue was INR 2,741 crore, up 30% year-over-year; consolidated revenue was Rs. 2,71,450 lakhs.

• Standalone EBITDA reached INR 714 crore, up 47% year-over-year, with a margin of 26.04%.

• Profit after tax for the quarter was INR 477 crore, up 53% year-over-year; consolidated net profit was Rs. 49,966 lakhs.

• Realized foreign exchange gain on sales was INR 52 crore.

• Other income for the quarter stood at INR 83 crore.

Outlook and guidance

• Only minor sales volume growth expected for FY25 due to weak demand outlook.

• Freight and raw material costs are expected to rise by 2%-3% each in the coming quarter.

• No price hikes have been taken yet; weak market demand limits ability to pass on cost increases.

• EBITDA margin for the full year is targeted to remain around last year's 24.8%.

• Advanced Carbon Black project (30,000 MTPA) at Bhuj is progressing as scheduled.