Amara Raja Energy & Mobility Ltd. share price target

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...

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...

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....

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%...

Net sales grew 17.6%

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...