Balkrishna Industries expects minor volume growth in FY25

Tempered by weak market conditions in Europe, India’s leading off-highway tyre maker Balkrishna Industries reaffirmed its minor growth forecast for its sales volume during the current financial year (FY2025). Europe is the largest market for the company, accounting for almost 43% of its total sales volume.

“Market scenario continues to be challenging. However, our strong profile built by brand investments has led us to achieve minor sales growth in the third quarter on a year-on-year basis. We hold on to our forecast of achieving minor growth volume growth in this financial year,” Joint Managing Director, Rajeev Poddar said.

For the first nine months of the financial year, Balkrishna Industries saw its sales volume grow by 11% to 233,211 metric tonnes on a year-on-year basis, while its third quarter volume rose 5% to 76,343 metric tonnes. Minor volume growth forecast for the full financial year implies flat to negative volume growth for the January-March period, as volume rose in double digits from April-December.

“The European market has been very challenging, you have seen its impact. However, the American and Indian market has grown. These are areas of concern and focus for us. Demand in the rest of the world is sustainable…Our largest market continues to be Europe, so the concern is Europe,” Poddar said.

The Aurangabad-based company is popular for its tyres in the specialty segments such as agricultural, construction, industrial, earthmover, port, all-terrain vehicle, and turf care applications in both cross-ply and radial construction. Case, New Holland, John Deere, Tafe, JCB, CAT, Kubota and Terex are some of its customers.

In FY24, Europe contributed around 47% of Balkrishna Industries' total volume, followed by India and the Americas regions, accounting for 26.8% and 16.9%, respectively. During the April-December period of the curent financial year, volume share from the European market came down to 42.6%, reflecting the weakness in the European market.

The company management has flagged that the demand environment remains challenging globally due to macroeconomic factors, such as recessionary fears, geopolitical issues, and rising costs of raw material and freight. Saving Europe, the company is witnessing improvements in the Americas, India and the rest of the world markets. 

However, even a minor growth in volumes during the current financial year would be an improvement in its performance, when compared with the previous financial year (FY24), when the company witnessed its volume decline by 3% to 2,92,628 metric tonnes after a peak volume of 3,01,181 metric tonnes in financial year 2023.

For the third quarter of the current financial year, Balkrishna Industries posted net profit growth of 42% on year to Rs 439 crore while revenue from operations grew 11% to Rs 2,571 crore. EBITDA grew 9% to Rs 639 crore, while EBITDA margin contracted by 52 basis points to 24.85%.