Fact based stock research
Balkrishna Industries (BSE:502355)

INE787D01026

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Balkrishna Industries stock research in summary

bkt-tires.com

ANALYSIS: With an Obermatt Combined Rank of 26 (worse than 74% compared with investment alternatives), Balkrishna Industries (Tires & Rubber, India) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Balkrishna Industries are a good value (attractively priced) with a consolidated Value Rank of 51 (better than 51% of alternatives), show above-average growth (Growth Rank of 51) but are riskily financed (Safety Rank of 32), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 26, is a hold recommendation based on Balkrishna Industries's financial characteristics. As the company Balkrishna Industries's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 51) and above-average growth (Obermatt Growth Rank of 51), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 32) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	51
Growth Rank	51
Safety Rank	32
Combined Rank	26

Country	India
Industry	Tires & Rubber
Index	Independent Boards Growth Markets
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Balkrishna Industries

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	18	41	48	51
GROWTH
GROWTH	97	31	71	51
SAFETY
SAFETY	39	47	31	32
SENTIMENT
SENTIMENT	n/a	9	4	^new
360° VIEW
360° VIEW	n/a	11	16	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Balkrishna Industries is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	18	41	48	51
GROWTH
GROWTH	97	31	71	51
SAFETY
SAFETY	39	47	31	32
COMBINED
COMBINED	64	23	46	26

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Balkrishna Industries the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 51 (better than 51% compared with alternatives), Balkrishna Industries shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Balkrishna Industries. Price-to-Profit (also referred to as price-earnings, P/E) is 53 which means that the stock price compared with what market professionals expect for future profits is lower than for 53% of comparable companies, indicating a good value concerning Balkrishna Industries's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 52, which means that the stock price is lower as regards to invested capital than for 52% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 67% of alternatives (only 33% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 55% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 51, is a buy recommendation based on Balkrishna Industries's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	16	17	29	33
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	55	47	50	53
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	8	36	45	52
DIVIDEND YIELD
DIVIDEND YIELD	37	43	42	45
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	18	41	48	51

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Balkrishna Industries; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 51 (better than 51% compared with alternatives), Balkrishna Industries shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Balkrishna Industries. Sales Growth has a rank of 55 which means that currently, professionals expect the company to grow more than 55% of its competitors. Capital Growth is also above 48% of competitors with a rank of 73. But Profit Growth only has a rank of 48, which means that currently professionals expect the company to grow its profits less than 52% of its competitors. And Stock Returns have also been below average with a rank of only 43. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 51, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	93	51	86	55
PROFIT GROWTH
PROFIT GROWTH	n/a	44	57	48
CAPITAL GROWTH
CAPITAL GROWTH	n/a	6	69	73
STOCK RETURNS
STOCK RETURNS	90	63	33	43
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	97	31	71	51

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Balkrishna Industries.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 32 (better than 32% compared with alternatives), the company Balkrishna Industries has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Balkrishna Industries is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Balkrishna Industries. Liquidity is at 56, meaning the company generates more profit to service its debt than 56% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 29, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 71% of its competitors. Leverage is also high at a rank of 34, which means that the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 32 (worse than 68% compared with alternatives), Balkrishna Industries has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	49	52	28	34
REFINANCING
REFINANCING	14	21	21	29
LIQUIDITY
LIQUIDITY	61	89	61	56
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	39	47	31	32

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Balkrishna Industries and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	10	3	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	59	37	^new
MARKET PULSE
MARKET PULSE	n/a	14	19	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	9	4	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Balkrishna Industries.
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