₹1130.45 CMP :
Balkrishna Industries is involved in the 'off-highway' tyres segment that caters to agricultural and industrial segments. The company enjoys 5 per cent global market share in the USD 15 billion OTR market, the company’s management aims to take this market share to 7.5-8 per cent in the coming two-three years. The company’s plan for backward integration with ramping-up its carbon black capacity from 60,000 MT to 140,000 MT by FY20-21E would help it to reduce costs and thereby improve its margin going forward. The low penetration in the US market, along with rising opportunity in mining industry, are likely to aid revenue growth. The stock of Balkrishna Industries has been trading with higher tops and multiple supports at Rs 1015 level. The stock has taken support near Rs 1015 and has given a consistent upside rally, hitting higher highs every time, forming an upward sloping rally. The stock hit all-time high at Rs 1467 level, formed a 'shooting star' pattern and retreated sharply more or less up to the multiple support at Rs 1015. Considering the weekly time frame, the stock consolidated for three consecutive weeks after taking support at 100-period EMA, followed by an attempt for a breakout in the recent week. On the daily time frame, the volumes are picking up and oscillators are heading towards the 55 level, suggesting momentum. Thereby, we see a bullish reversal in the stock.