Balkrishna Inds (BALKRISIND)

FairStock Score: 48/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Strong promoter holding of 58.30% aligns management with minority shareholders.
• Conservative balance sheet with debt/equity of 0.35 and Altman Z-Score of 3.58 indicating financial safety.
• Capital efficiency is decent: ROCE 16.67% and ROE 12.63%.
• Positive free cash flow of ₹284 Cr and Piotroski F-Score of 7/9 suggest healthy fundamentals.
• Historical growth track record: 5-year revenue CAGR of 12.56%.

Concerns

• Valuation is stretched: P/E 35.12, P/B 4.22, and EV/EBITDA 120.27.
• Price is far above Graham Number of ₹905.91 and DCF intrinsic value of ₹54.16, implying a negative margin of safety.
• Near-term momentum has deteriorated: sales growth is only 2.56% and profit growth is -26.00%.
• Dividend yield of just 0.67% offers little downside support for shareholders.

AI Analysis

When I look at Balkrishna Inds, I see a company with many of the qualities I appreciate: a 58.30% promoter holding, a debt-to-equity of just 0.35, and an Altman Z-Score of 3.58 that tells me the balance sheet is not under stress. The Piotroski F-Score of 7/9 also suggests fundamentals are reasonably sound. ROCE of 16.67% and ROE of 12.63% indicate the business has historically used capital well, and positive free cash flow of ₹284 Cr gives it some room to breathe. But as Graham taught me, a wonderful business can still be a terrible investment if you overpay. At ₹2,264.90, I am being asked to pay 35.12 times trailing earnings, 4.22 times book value, and an eye-watering 120.27 times EV/EBITDA. The Graham Number is only ₹905.91, so the market price is far above any conservative value. The DCF intrinsic value of ₹54.16 only makes the gap more frightening. Meanwhile, growth has stalled badly: five-year revenue CAGR of 12.56% looks good historically, but latest sales growth is just 2.56%, and profits have fallen 26%. The latest quarter’s net profit of ₹382 Cr on sales of ₹2,737 Cr is decent, but it cannot justify this valuation. The low dividend yield of 0.67% means I am not being paid to wait. This looks like a cyclical tyre business that had strong years, but the current downturn in earnings and the absurd valuation leave no margin of safety. A good company, possibly even with a niche moat, but at this price it fails my margin-of-safety test. I would wait for either a meaningful earnings recovery or a much lower price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer