Balkrishna Industries hit lower circuit of 10% at Rs 2075.75 after the tyre maker's standalone net profit tumbled 69.7% to Rs 99.62 crore in Q3 FY23 as against Rs 328.58 crore posted in Q3 FY22.
Revenue from operations rose 5.5% YoY to Rs 2142.32 crore in the quarter ended 31 December 2022.Profit before tax stood at Rs 141.84 crore in Q3 FY23, sliding 67.7% from Rs 438.72 crore recorded in Q3 FY22.
EBITDA de-grew 17% YoY to Rs 423 crore in Q3 FY23. EBITDA margin slipped to 19.1% in Q3 FY23 as against 24.4% in Q2 FY22.
Total expense jumped 20% YoY to Rs 2,043.59 crore in Q3 FY23. Raw material cost stood at Rs 1,082.52 crore (up 8.81% YoY) while finance cost was Rs 13.60 crore (up 659.78% YoY) during the period under review.
As on 31 December 2022 , gross cash and cash equivalents stood at Rs 2,082 crore.
The company's consolidated net profit slumped 68% to Rs 108.38 crore despite of 5.9% increase in revenue from operations to Rs 2,165.57 crore in Q3 FY23 over Q3 FY22.
Meanwhile, the board declared third interim dividend of Rs 4 per equity share for the financial year 2022-23 and the payment thereof shall be credited/dispatched within 30 days from the date of declaration to such shareholders as on record date, 18 February 2023.
The company management said, "As expected Q3 volumes were 66,480 MT. The company continues to face challenges of de-stocking in Q4 however the intensity of the situation is receding on month-on-month basis.
The freight cost correction witnessed in the last few months has led to improvement in margins which is reflected in freight costs which now stand at around 9% of sales in Q3. Expect further benefits on account of freight to reflect in Q4 and fully in Q1 FY24. The company has lowered the surcharge to end customers on account of freight and the same is reflected in our ASP which has moved down about 6% on QoQ basis.
The aspect which impacted margins negatively and almost negated the impact of freight costs were raw material costs. While raw material prices have corrected, the company not fully enjoy the benefits due to high-cost raw material inventory in the system. Lower raw material and freight costs, better hedge rate, better end market situation gives hope for a margin recovery in FY24.
Balkrishna Industries is engaged in the business of manufacturing and selling of Off-Highway Tyres (OHT) in the specialist segments such as Agricultural, Industrial & Construction, Earthmovers & Port, Mining, Forestry, Lawn & Garden and All Terrain Vehicles (ATV).
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