Amara Raja Batteries (ARBL) reported steady results for Q3FY19 Revenues came in at | 1,695 crore (up 9.1% YoY, down 3.3% QoQ) According to the management, the automotive segment displayed strong volumes during the quarter, especially in the aftermarket space. Industrial segment growth was steady in comparison EBITDA rose 4.6% YoY to | 253 crore. The EBITDA margin contracted 64 bps YoY but expanded 142 bps QoQ to 14.9%. On a YoY basis, margins were impacted due to higher raw material cost...

Revenue in line lead price shows resilience Amara Raja Batteries Ltd (ARBL) is India's second largest Lead-acid battery manufacturer. Its segment includes automotive and industrial lead acid batteries, with market leadership in Telecom segment. ARBL has approved an investment of Rs540cr for the deployment of...

Outlook and valuation: We believe Amara Raja holds durable competitive advantages over peers, with strong brand, technical expertise (via parent JCI global brand) and its lower cost structure (compared to its peers). We expect margins to improve in H2FY19 (despite weak H1FY19 margins) on price hikes, falling lead prices (down 6% in last 3 months) and cost improvement measures taken by the company. The company foresees opportunities in the energy storage and electric vehicles space. We maintain our ACCUMULATE rating on the stock with a revised target...

ICICI Securities Ltd | Retail Equity Research Amara Raja Batteries' (ARBL) revenues grew 22.8% YoY to | 1,753 crore vs. our estimate of | 1,691 crore. Overall volume & price mix was at ~16% & ~7%, respectively. According to the management, its 2-W & 4-W business grew ~13% YoY & ~19% YoY, respectively, while the industrial segment grew ~35% YoY led by telecom, UPS & Railways. The growth in telecom is attributable to low base of last year and is getting stabilised now. Further, exports grew ~40% YoY...

ICICI Securities Ltd | Retail Equity Research Amara Raja Batteries' (ARBL) revenues grew 18.8% YoY to | 1,779 crore vs. our estimate of | 1,747 crore. According to the management, automotive battery business achieved strong volume growth (~31% YoY) across its business segments. Its industrial segment stayed flat YoY, after ARBL saw double digit de-growth in telecom space. However, it was offset by growth in other segments. EBITDA margin contracted 49 bps YoY & 95 bps QoQ to 12.4% vs....

New expansion announced: The board has approved setting up a greenfield automotive battery plant with a capacity of 6.5 mn units (capex Rs7 bn). Outlook and valuation: We believe Amara Raja holds durable competitive advantages over peers, with strong brand, technical expertise (via parent JCI global brand) and its lower cost structure (compared to its peers). We expect margins to improve in H2FY19 (despite weak Q1FY19 margins) on price hikes and cost improvement measures taken by the company. The company foresees opportunities in the energy storage and electric vehicles space. We recommend an ACCUMULATE...

Amara Raja Batteries Ltd (ARBL) is India's second largest Lead-acid battery manufacturer. Its segment includes automotive and industrial lead acid batteries, with market leadership in Telecom segment. Q4FY18 revenue grew by 18%YoY which was largely driven by automotive segment but industrial segment remained subdued. EBITDA margin contracted by 40bpsYoY (-230bps QoQ) due to increase in RM cost. Lead price increased by 4.7%YoY. ARBL should continue to be preferred supplier to OEM due to its excellent...

ICICI Securities Ltd | Retail Equity Research Amara Raja Batteries' (ARBL) Q4FY18 revenue was at | 1,581 crore (up 17.6% YoY) vs. our estimate of | 1,637 crore. The buoyancy in automotive sector has resulted into healthy growth momentum (4-W & 2-W segment grew 25% YoY & 30% YoY, respectively). However, the same was partly offset by industrial space that reported muted growth mainly due to telecom space, which reported de-growth The EBITDA margin contracted 39 bps YoY, 222 bps QoQ to 13.3%...

Sales increased to Rs15.8 bn (+1.8% YoY, +17.6% QoQ) and was mainly driven by higher Automotive battery volumes. However, Industrial battery volumes continued to witness muted demand due to weak Telecom sector. EBITDA at Rs2,107 mn (+14.3% YoY, -12.8% QoQ) was 17.0% below our estimate. Higher other income (+57.4% YoY) was offset by higher tax rate (37%). Amara Raja's net profit increased only 10.7% YoY to Rs1,098 mn....

Revenue grew by 18% yoy to Rs15.8bn (Emkay Est: Rs16.8bn; Consensus Est: Rs15.9bn), which was below our estimate, despite robust growth in Automotive segment (~30% yoy), owing to a muted performance in the Industrial segment. EBITDA margin contracted by 220bps qoq to 13.3% (Emkay Est: 15.1%; Consensus Est: 15.1%), led by commodity inflation and higher share of traded goods (in Tubular Batteries...

Net sales grew 17.6%

Amara Raja Batteries Limited undertakes manufacturing of lead-acid storage batteries for industrial and automotive applications in India. It is a company with 26% equity each from the Galla Family and Johnson Controls, the US. Its products are supplied to telecom, railways, power control, solar and uninterruptible power supply (UPS) under industrial battery business, and to automobile original equipment manufacturers (OEMs), replacement market and private label customers under automotive battery business. Under Services, it provides installation, commissioning and maintenance....

Revenue in line margin improved led by price hike Amara Raja Batteries Ltd (ARBL) is India's second largest Lead-acid battery manufacturer. Its segment includes automotive and industrial lead acid batteries, with market leadership in Telecom segment. Q3FY18 revenue grew by 16.9%YoY which was largely driven by automotive segment but industrial segment remained subdued. EBITDA margin improved by 20bpsYoY due to price hikes taken for increase in RM cost and effective cost strategies....

Sector: Auto Parts & Equipment /Mid-Cap | Earnings Update 3QFY18 Background: Amara Raja Batteries Ltd (ARBL) is the second largest automotive battery manufacturer and the largest supplier of industrial storage batteries in India. It is a joint venture between the Galla family and US based Johnson Control (JCI) with 26% each. JCI, the global leader in lead-acid automotive batteries and advanced batteries for start-stop, hybrid and electric vehicles, provides technical support to ARBL. Company's business model is de-risked as it caters to...

Amara Raja Batteries Ltd Q3FY18 results comment Revenue rose by 8.82% to Rs. 1553.46 Cr in Q3FY18 when compared to the previous quarter. Also, it rose by 17.07% when compared with Q3FY17.

Q3FY18 EBITDA beat estimates by 5% on operating leverage benefits led by new plant ramp-up. EBITDA margin at 15.6% (up 20 bps YoY/ down 113 bps QoQ) was robust despite lead price increases. Volume growth remains robust in auto OE, aftermarket and UPS segments (together account for ~75% of revenue).

EBITDA at Rs2,357 mn (+18.5% YoY, +1.5% QoQ) was in line with our estimate. EBITDA margin improved 18 bps YoY to 15.6% despite rising lead prices. Net profit stood at Rs1,260 mn (+19.7% YoY, +5.7% QoQ). We largely maintain our FY18/19 estimates and introduce FY20 numbers. We maintain our BUY rating on the stock. Key Highlights and Investment Rationale Automotive sales volumes strong: Sales at Rs Rs15.1 bn (+17.1% YoY, 8.8% QoQ) was mainly driven by higher Automotive battery volumes. Also, exports to South East Asia...

Amara Raja Batteries' (ARBL) Q3FY18 revenue came in at |1,553 crore (up 16.9% YoY) vs. our expectations of | 1,517 crore. According to management, the automotive segment clocked healthy volume growth across the OEM and aftermarket segments. The industrial battery recorded significant growth in UPS segment while volumes in telecom segment also increased on a YoY basis EBITDA margin expanded 20 bps YoY but contracted 113 bps QoQ to 15.6% vs. our estimate of 16.1%. Its gross margin contracted 174...