Balkrishna Industries Shares Plunge 10% — Buy, Hold, or Sell?

Balakrishna Industries shares fell by more than 10% in the intraday season today after the tyre maker posted weak Q4 results and downgrade from Nomura. The brokerage house revised its rating from “buy” to “neutral” and slashed the target price, highlighting risks emerging from the company’s entry into more competitive market segments.

Q4 results

Balakrishna Industries posted a net profit of ₹362 crore in the March quarter (Q4FY25), a fall of 25% YoY. The decline came despite a 5% surge in the company's revenue at ₹2,838 crore. The jittery quarter came on the back of rising input, finance, and employee costs, which dampened the revenue growth.

For FY25, the company posted a net profit of ₹1,628 crore, against ₹1,438 crore in FY24. Annual revenue soared 13% to ₹10,615 crore. EBITDA rose 16% to ₹2,682 crore.

Stock performance

Shares of Balkrishna Industries were down by 10.3% to intraday low of ₹2,385 on the BSE, down 29% from its 52-week high of ₹3,377.95, which touched in June 2024. As of April 2025, the stock hit a 52-week low of ₹2,157.20.

Downgrade from Nomura

Reducing the target price from ₹3,242 to ₹2,644, Nomura downgraded the stock from “neutral” from “buy”. The brokerage cited the problems surrounding the company’s strategy to diversify beyond its traditional off-highway tyre (OHT) focus into the highly competitive truck and passenger car radial (TBR/PCR) segments.

As per the brokerage form, the new segments are already captured by established players, marking a hurdle for Balkrishna Industries’s foray into the segment. The firm is required to enhance the brand call in these segments, while also making considerable investments in bolstering the distribution networks.

Despite the above-mentioned concerts, Nomura kept its earnings estimates unchanged, but revised the valuation by downgrading the outlook. It now expects the company to trade at a lower multiple range of 12x–16x earnings, compared to the earlier 14x–18x.