Amara Raja Batteries (Q4 FY14)

India Infoline News Service | Mumbai |

Amara Raja Batteries reported revenues of Rs8.8bn compared to our estimate of Rs8.6bn.

CMP Rs392, Target Rs453, Upside 15.5% 
  • Revenues at Rs8.9bn higher by 10.5% yoy; better than our estimates

  • OPM at 15.5% was higher by 159bps yoy but declined 191 bps qoq, yoy improvement was on the back of price hikes implemented over the past on year, sequential decline was owing to pressure on gross margins

  • PAT at Rs800mn was higher by 34.3% yoy but fell 15.7% qoq and was lower than estimates

  • Maintain our rating to BUY with a revised 9-month target of Rs453 as we believe OEM volumes for passenger cars will rebound from H2 FY15 and for two-wheeler will continue to remain strong

Result table
(Rs m)
Q4 FY14
Q4 FY13
% yoy
Q3 FY14
% qoq
Net sales
8,879
8,038
10.5
8,629
2.9
Material costs
(5,942)
(5,529)
7.5
(5,660)
5.0
Personnel costs
(415)
(352)
17.7
(392)
5.7
Other overheads
(1,146)
(1,037)
10.5
(1,074)
6.7
Operating profit
1,377
1,119
23.1
1,503
(8.4)
OPM (%)
15.5
13.9
159 bps
17.4
(191) bps
Depreciation
(190)
(267)
(29.1)
(157)
20.9
Interest
(6)
(3)
122.1
(0)
1,900.0
Other income
61
71
(13.9)
73
(15.9)
Extra ordinary items
(39)
2
-
PBT
1,204
922
30.6
1,419
(15.1)
Tax
(404)
(326)
23.7
(469)
(13.9)
Effective tax rate (%)
33.5
35.4
33.0
Reported PAT
801
596
34.3
950
(15.7)
Adj. PAT margin (%)
9.0
7.4
160 bps
11.0
(199) bps
Ann. EPS (Rs)
18.7
14.0
34.3
22.2
(15.7)
Source: Company, India Infoline Research

Revenues better than expectations

Amara Raja Batteries reported revenues of Rs8.8bn compared to our estimate of Rs8.6bn. Sales were higher by 10.5% yoy and 2.9% qoq. For the full year the company reported a revenue of Rs34.5bn a growth of 16.6% yoy. The automotive battery business reported strong double digit growth in revenue, aided by strong volume expansion both in four wheeler and two wheeler batteries in the replacement market, while the OEM demand continued to be flattish. The supply of Amaron and PowerZone branded tubular inverter batteries and Home UPS under private label program helped the segment gain in volumes and market share. The Industrial battery business has also reported double digit revenue growth despite capacity constraints and subdued demand for UPS batteries. While the OEM demand in UPS sector is under stress, the preference for the Company’s UPS batteries in replacement market is encouraging.


BSE 779.75 7.90 (1.02%)
NSE 780.55 9.60 (1.25%)

***Note: This is a NSE Chart

 

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