Why Did Balkrishna Industries Experience a 21% Drop in Q2 Profit?
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Synopsis
Balkrishna Industries Limited has reported a concerning drop in net profit for the second quarter, raising questions about profitability and operational challenges. The firm continues to affirm its commitment to capital projects while announcing an interim dividend for shareholders.
Key Takeaways
- Net profit decline: 21.3 percent YoY to Rs 273 crore.
- Revenue drop: 1.1 percent to Rs 2,393 crore.
- EBITDA fell: 11.7 percent to Rs 511.6 crore.
- Operating margin: Decreased to 21.4 percent.
- Second interim dividend: Rs 4 per equity share.
Mumbai, Oct 31 (NationPress) Balkrishna Industries Limited (BKT) announced a 21.3 percent year-on-year (YoY) decrease in its net profit, amounting to Rs 273 crore for the second quarter of FY26, down from Rs 347 crore in the equivalent quarter of the previous fiscal year (Q2 FY25).
The company's revenue from operations saw a modest decline of 1.1 percent, totaling Rs 2,393 crore compared to Rs 2,419 crore during the same period last year, as indicated in their stock exchange filing.
EBITDA (earnings before interest, tax, depreciation, and amortisation) also fell by 11.7 percent to Rs 511.6 crore, down from Rs 579.4 crore a year prior.
The operating margin decreased to 21.4 percent from 24 percent in the corresponding quarter last year, signaling profitability challenges, according to the company’s report.
The Board of Directors announced a second interim dividend of Rs 4 per equity share (200 percent) on a face value of Rs 2 per share for FY2025-26.
“The Board has approved a second interim dividend of Rs 4/- per Equity Share (200 percent) on the Equity Shares of Rs 2/- each (face value) for the financial year 2025-26,” stated the firm in its filing.
Shareholders can expect the dividend to be credited or dispatched within 30 days following the declaration date, with November 7, 2025 designated as the record date, as per regulatory disclosures.
The company affirmed that all previously announced capital expenditure projects are progressing according to plan.
On Friday, shares of Balkrishna Industries closed 1.77 percent lower at Rs 2,285.50 on the National Stock Exchange (NSE).
Based in Mumbai, Balkrishna Industries is a leading global manufacturer of Off-Highway Tires (OHT) serving sectors such as agriculture, construction, and mining.
Founded in 1987, the firm operates in over 160 countries through a robust distribution network and caters to both original equipment manufacturers (OEMs) and the replacement market.
BKT has five manufacturing facilities in India located in Waluj, Bhiwadi, Chopanki, Dombivali, and Bhuj, along with subsidiaries in Europe and North America.
The company is led by Chairman and Managing Director Arvind Poddar and Joint Managing Director Rajiv Poddar.
Point of View
We recognize the challenges faced by Balkrishna Industries Limited. The reported decline in profitability highlights the intense market pressures impacting the company. It is crucial for stakeholders to remain informed as BKT navigates its operational hurdles while continuing its commitment to shareholder returns.
NationPress
03/11/2025
Frequently Asked Questions
What contributed to the profit decline for Balkrishna Industries?
The profit decline was primarily due to decreased revenue from operations and lower EBITDA, signaling profitability pressures faced by the company.
What is the interim dividend announced by the company?
Balkrishna Industries announced a second interim dividend of Rs 4 per equity share (200 percent) for FY2025-26.
When will the dividend be credited to shareholders?
The dividend will be credited or dispatched within 30 days from the declaration date, with November 7, 2025, set as the record date.
How does BKT's performance compare to previous quarters?
The company reported a year-on-year decline in net profit, reflecting challenges compared to the same quarter last fiscal year.
Where are BKT's manufacturing facilities located?
BKT has five manufacturing facilities in India located in Waluj, Bhiwadi, Chopanki, Dombivali, and Bhuj.
