Balkrishna Industries' Q3FY15 EBITDA and PAT surpassed estimates 9% and 10%, respectively. The company reported 13% YoY volume surge with demand recovery in US (20% of sales) and stabilizing scenario in Europe.

Commenting on the investment rationale, Edelweiss Research said, "We have revised down FY16 earnings 3% factoring in lower-than-expected volume guidance of 9-12% growth. Further, we have introduced FY17E earnings with 20% growth and capacity utilization at 72%, which provides scope for further uptick, Considering strong free cash flow generation of Rs 18 billion over FY15-17E versus negative cash flow in FY14, no major capex in next 3 years, We maintain 'Buy' with a target price of Rs 875 based on 13x FY17E EPS."

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