Jinesh Gandhi

MOSL: AMARA RAJA BATTERIES (Buy)-In-line operating performance-PAT above est

Amara Raja Batteries: In-line operating performance; PAT above est. led by higher other income

(AMRJ IN, Mkt Cap USD2.2b, CMP INR845, TP INR1035, 23% Upside, Buy)


  • Revenue in-line, helped by growth in auto, UPS and telecom segments: Net sales grew 17.1% YoY (+8.8% QoQ) to INR15.5b (in-line), led by growth in auto across the OE and aftermarket segments. This was led by continued channel expansion of Amaron and Powerzone brands. Further, higher exports to South-East Asia and Middle-East countries aided growth in the auto segment. Industrial battery segment too recorded growth, backed by higher sales in UPS segment and a sequential increase in volumes in the telecom segment.
  • EBITDA margin in line at 15.6%; lead inflation partially offset by price hike: Gross margin shrunk 90bp YoY (-190bp YoY) to 33% (in-line). Management indicated that continued lead price inflation was partially offset by appropriate pricing actions. EBITDA margin expanded 20bp YoY (-110bp YoY) to 15.6%, led by a favorable product mix (higher share of autos), optimal utilization, and price hikes. High other income and low depreciation boosted PAT by 20% YoY (+5.7% QoQ) to INR1.34b (est. of INR1.24b).
Amara Raja Batteries

Amara Raja Batteries engaged in the manufacture and sale of lead acid storage batteries for industrial and automotive applications in India. Co.'s industrial products include Powerstack batteries for use in telecommunications, power utilities, railways, defense, and other heavy industrial applications; and Amaron Quanta, a UPS battery with a back-up for a back-up. Co. offers automotive products, which include PRO, FLO, GO, Black, Fresh, Hi-way, Harvest, Shield, Pro Bike rider, and Optima batteries under the Amaron brand name. Co. supplies automotive batteries to various original equipment manufacturers.

Motilal Oswal
Motilal Oswal

​Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance. 

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

Jinesh Gandhi

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