Balkrishna Industries Q1 FY23 standalone revenues at INR 2,646 cr, up 46% YoY, Auto News, ET Auto
New Delhi:Indian tyre manufacturing company on Friday reported standalone revenues at INR 2,646.28 crore for Q2 FY23, up 45.96% from INR 1,813.07 crore in Q1 FY23.
The company’s quarterly net profit stood at INR 319.74 crore in June 2022, down 3.46% from INR 331.20 crore in June 2021.
“We continue to see a sustained uptick in demand for BKT tires. However, in Q2, we expect sluggish demand given macro challenges in Europe coupled with heat waves and inflationary trends in the USA,” Balkrishna Industries said. However, the management retained its sales volume guidance of 3.2-3.3 lakh tonnes for FY23.
EBITDA for the quarter stood at INR 557.78 crore for Q1 FY23 in June 2022 down 5.6% YoY.
In Q1 FY23, EBITDA margin contracted 910 basis points (bps) year-on-year (y-o-y) to 20.1% and gross margins declined 380 bps y-o-y. One basis point is 0.01%. What’s more, the road ahead is not smooth for the company as far as this parameter is concerned.
According to a company regulatory filing, the raw material prices have remained at elevated levels during the current quarter. In Q1FY23, raw material costs were at 46.6% of sales compared with 42.8% in Q1 FY22 and 45.3% in Q4 FY22. However, it expects relief in raw material prices to be visible from Q4 FY23 onwards. It also expects relief in logistics costs towards the end of Q3 or early Q4.
Further, in Q1 FY23, the company took a price hike of 5%, but in Q2 so far it has been unable to raise product prices because the market conditions were challenging, hampering its ability to pass on the burden of increased costs.
Meanwhile, there is no good news on the demand front, as well. In Q1 FY23, its volumes grew 21% y-o-y to 83,153 mt and the company has guided for sales volumes of 320,000-330,000 mt in FY23, the tyre-maker reported.
The tyre manufacturer, however, expects demand to be sluggish in Q2 FY23 due to macro challenges in Europe, heat waves, and inflationary trends in the US market.