While the company beat estimates across most parameters, it is the 24 per cent year-on-year (Y-o-Y) growth in standalone revenues that stood out. Apollo Tyres’ standalone revenues were up 16 per cent, while MRF reported 10 per cent growth.
The gains for BIL on the top-line front were led by higher-than-expected Europe volumes and improved overall realisation. Overall volumes were up 16 per cent Y-o-Y to 93,770 tonnes, while realisation saw 6 per cent growth Y-o-Y to ₹3,63,517 per unit. In terms of geography, the India business grew by 32 per cent, followed by Europe, which was up 16 per cent, and the rest of the world, with gains of 15 per cent. The North American market, however, saw a decline of 16 per cent on a higher base in the year-ago quarter.
Europe is BIL’s largest market, accounting for 40 per cent of total volumes, while North America accounts for 13 per cent. According to Volvo, demand for the construction equipment (CE) segment is likely to improve in CY26 in both Europe and North America. Furthermore, according to John Deere, demand for the tractor segment is likely to be flat to positive in CY26 in both Europe and North America.
After a stronger quarterly volume performance, particularly in Europe, Anand Rathi Research expects Europe’s volumes to witness low double-digit growth (from flat earlier) in FY27. Mumuksh Mandlesha and Dishant Jain of the brokerage expect its OHT volumes to clock a strong 12 per cent annual growth over FY26-28, with FY27 registering growth of 17 per cent. This growth is expected to be led by India, with a rise of 19 per cent, followed by America at 9 per cent. Europe and the rest of the world are expected to post growth of 8 per cent each during this period.
Analysts led by Raghunandhan NL of Nuvama Research expect BIL to outpace the industry on the back of its compelling quality-price mix. For FY26-28, the brokerage is building in volume and revenue growth of 11 per cent and 19 per cent, respectively. Its market share in the global OHT segment, worth $20 billion, is just 6-7 per cent. Its share of the agriculture market is 8-9 per cent, while that of the non-agriculture market is 2-3 per cent. The company is eyeing a medium-term target of 8 per cent, led by deeper penetration in existing markets and the addition of new products/customers. Nuvama Research has a ‘buy’ rating with a target price of ₹2,600.
BIL’s operating profit grew 7 per cent Y-o-Y and came in better than estimates on account of higher-than-expected revenue. Margins, however, contracted by 320 basis points Y-o-Y and 230 basis points quarter-on-quarter (Q-o-Q) to 20.6 per cent due to higher input and employee costs. Personnel costs increased on account of a higher number of employees for new business and wage increases.
Anand Rathi Research expects margins to gradually rebound as the impact of commodity price inflation tapers with calibrated price increases, currency hedges and some cooling off in input prices. Considering expectations of strong volume growth and a large part of the commodity price pressure being behind it, the brokerage has raised its rating to ‘buy’ and increased its target price to ₹2,950 from ₹2,400 earlier.
