Target: ₹2,820

CMP: ₹2,283.95

India OHT exports in Jan’24, at $151 million, were higher by 13 per cent y-o-y as against $139 million average monthly exports in CY23. This was driven by strong growth in EU/US agri segment, with overall agri segment exports being up about 17 per cent y-o-y vs. OTR exports being up 6 per cent.

In US, base turned favourable from Jan’24 as expected in both agri/OTR segments, leading to YoY growth of 32/23 per cent; in comparison, EU saw growth of 23/5 per cent with the effects of a favourable base already kicking in a quarter back.

We expect, in FY24, India OHT exports to deliver about 10 per cent growth YoY on a base of $139 million a month on an average in CY23; against that, we build in 12 per cent volume growth for BIL to our FY24 estimates.

Downside risks:Weakness in retail offtake from key markets may impact volume offtake for BIL in coming quarters, post weak volumes in the past couple of quarters due to inventory destocking.

Inability to enhance market share in global OHT due to competition intensifying.  Inability to rebound to 28 per cent operating margin level due to adverse input cost scenario and higher competition. 

We maintain BUY on BIL with a DCF-based unchanged TP of ₹2,820, implying 25x FY26 EPS.