HDFC Securities has maintained 'Buy' on Balkrishna Industries with target price of Rs 608 as against current market price (CMP) of Rs 504 in its reports.

Commenting on the investment rationale, the stock broker said, ''Despite the recent rally (+33% in last 1 month) in Balkrishna Industries (BIL) we retain our positive view on the business. Demand recovery is on the cards in the global markets esp. in the US and European markets and BIL is best positioned to leverage on the same given lower cost, brand and available capacity. Company has aggressively increased marketing activities and network expansion in recent quarters. BIL is one of the prime sponsors for the 'Monster Jam' truck event in US and has opened new offices globally in recent past.

Favorable rubber prices are margin accretive for the company; however any significant INR strengthening will negate benefits. Given demand revival, entry in the ultra large OTR tyres and softer rubber prices, we upgrade our TP to Rs 608/sh revising multiple to 10x (from 7.5x) FY16E EPS of Rs 60.8/sh. Maintain Buy.''

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