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Stock recommendation: Balkrishna Industries — Reduce — TP Rs.1260
Publish date: 13th June, 2018
Fairly valued, downgrade to reduce
In our July 2 update (you can read it here), we had recommended buying Balkrishna Industries stocks as we felt positive about the company’s profitability in the next 10-15 years.
But a lot has happened during that period. The company’s stocks have increased by 18% and its valuation has hit the ceiling. We don’t expect any advantages in buying the stocks at current levels.
Key Highlights
- You can read our July 2 report to analyze why Balkrishna Industries has been a coveted buy for traders in the last 10 days or so.
- In addition, we feel that the company can be one of the largest off-highway tire-makers in the next decade-and-a-half.
- The company’s EPS is likely to post a CAGR of 24% in the next three financial years. But since the stock valuations have hit the ceiling, we now switch our company outlook to neutral.
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