Balkrishna Industries Q1 FY23 standalone revenue at INR 2,646 CR, up 46% YoY, Auto News, ET Auto
New Delhi:The Indian tire company on Friday reported self-sustaining revenue of INR 2,646.28 crore for the second quarter of FY23, up 45.96% from INR 1,813.07 crore in the first quarter. of exercise 23.
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 increase in demand for BKT tires. However, in the second quarter, we expect sluggish demand given macro challenges in Europe, coupled with heat waves and inflationary trends in the United States,” Balkrishna Industries said. However, the management stuck to its sales volume forecast of 3.2 to 3.3 lakh tonnes for FY23.
EBITDA for the quarter stood at INR 557.78 crore for the first quarter of FY23 in June 2022, down 5.6% year-on-year.
In the first quarter of FY23, EBITDA margin contracted 910 basis points (bps) year-on-year (yoy) to 20.1% and gross margins decreased 380 bps year-on-year. One basis point equals 0.01%. Moreover, the road ahead is not smooth for the company when it comes to this parameter.
According to a company regulatory filing, commodity prices have remained at elevated levels in the current quarter. In Q1FY23, raw material costs represented 46.6% of sales, compared to 42.8% in Q1 FY22 and 45.3% in Q4 FY22. However, he expects the relief in commodity prices to be visible from the fourth quarter of FY23. He also expects relief in logistics costs towards the end of the third quarter or the beginning of the fourth trimester.
In addition, in the first quarter of FY23, the company increased its prices by 5%, but in the second quarter, it has not been able to increase product prices so far because the conditions of the market were difficult, which affected its ability to pass on the burden of rising costs.
Meanwhile, there is also no good news on the demand side. In the first quarter of FY23, its volumes increased 21% year-on-year to 83,153 tons and the company forecast sales volumes of 320,000 to 330,000 tons in FY23, reported the tire manufacturer.
The tire maker, however, expects demand to be sluggish in the second quarter of FY23 due to macroeconomic challenges in Europe, heat waves and inflationary trends in the US market.
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