Fundamental Analysis

Amara Raja Batteries Limited

Ticker : 500008
BUY : Rs 743.60
Target : Rs 820

is one of the largest manufacturers of lead-acid batteries for both industrial and automotive applications in the Indian storage battery industry. It is a supplier to major telecom service providers & equipment manufacturers, UPS sector, Indian Railways as well as to the power, oil & gas industry segments. On a consolidated quarterly front, its net sales increased by 14.17 per cent in Q2FY21 to Rs 1,935.52 crore from Rs 1,695.31 crore in Q2FY20. The company reported an operating profit of Rs 351.45 crore in Q2FY21, up by 13.37 per cent from Rs 309.99 crore reported in Q2FY20. The net profit decreased by 7.93 per cent from Rs 218.61 crore in Q2FY20 to Rs 201.27 crore in Q2FY21. Demand in the automotive segment saw a sharp rise while demand from telecom and commercial UPS market segments are increasing to keep the data network uptimes near to 100 per cent. With festive seasons coming and foreign markets opening, we expect the demand to go further up. Hence we recommend a BUY.