Amararaja Batteries Limited: Powering Ahead


(Abhishek Basumallick) #41

Thanks Dhwanil, will go over the section once again. But I disagree with your view on the quality of the AR :slight_smile:


(Shashi) #42

(HG) #43

A question for technical gurus - for the past 3 days, there has been a huge increase in trading volumes but the delivery %s have been low.

trading volumes - 202k, 161k, 166k and delivery %'s - are 12%, 16%, 23% (moneycontrol data)

Is this a sign of froth buildup? Should we wait before adding to positions?


(Rudra Chowdhury) #44

Hi H G,

Delivery %age should be viewed in the context of average shares delivered and not %age alone. Avg delivery volumes for last 30 days was 80K and 8-day avg delivery at 53% meaning roughly 40K shares.

Today’s delivery of 23% of 166K corresponds to 38K shares which was almost same as average. Hence this cannot be termed as froth buildup.

Regarding adding to positions, the share went ex-split today from Rs 2 FV to Re 1 FV. So in about 2-3 weeks an equal no of shares corresponding to current free float will hit the markets.

The added liquidity may result in intermittent corrections. So pace your purchases accordingly to take advantage of the situation.


(HG) #45

Hi Rudra - thanks for the explanation!


(Atul Garg) #46

Rudra/HG,

I am no technical expert, But I do see the delivery volumes decreasing

8 day Avg: 53%

5 day Avg: 41%

3 day Avg: 35%

day: 23%

So thats a sure shot indication more and more people are trading on this counter rather than taking delivery, which could be a potential froth and yes as Rudra mentioned probably it is good to wait for some correction in near future to add positions.

Atul


(Rudra Chowdhury) #47

Hi Atul,

I guess you missed the gist of the post. :slight_smile:

It is obvious from the figures that the %age delivery volumes are decreasing

, meaning a lot of people are day trading.

Now what we dissected was that absolute delivery volume which was earlier 40K shares per day was almost similar

around 38K today hence if considered on regular base volumes of around 80K shares the delivery volume is still high 50%.

Hence normal delivery based buying is still going on as usual and cannot be decisively considered as froth build up.


(Atul Garg) #48

Thanks forclarificationRudra,

Thats what I am wondering whether we should consider the 40K avg delivery in isolation or in light of traded volume which has moved from 40K to 120+ K.

would appreciateseniors/your inputs on same.

Atul


(Rudra Chowdhury) #49

Hi Atul,

There are experts here with Technical analysis knowledge who will be able to guide you better on this.

Frankly speaking, if you are a long term investor do not put much emphasis on this technical nitty gritties and concentrate on the bigger picture.

I am more of a buy and hold kind of guy, so if there are intermittent dips will be happy to buy more. Like from the famous Charlie Munger speech, he says people who do good do transact fewer times. If you trade excessively chances of ending up on the wrong side are higher.

The main thing is conviction on the idea and how comfortable you are looking ahead. A few 10-15 rs here and there do not matter much in the long term.

regards,

Rudra

Thanks forclarificationRudra,

appreciateseniors/your


(Atul Garg) #50

Thats very true !!

Thanks forclarificationRudra,

Thats what I am wondering whether we should consider the 40K avg delivery in isolation or in light of traded volume which has moved from 40K to 120+ K.

would appreciateseniors/your inputs on same.

Atul


(Rahul S) #51

An interesting thread on Amara Raja. Recently I came across Tata Green Batteries in Toyota Cars. From the net. I could see that there are part ofTata AutoComp Systems Limited.http://tacogroup.com/aboutus/index.htm

Will this brand be a threat for Amara Raja? The fact that Toyota(a name symbolic with reliability) has trusted Tata Green Batteries might mean something. Any thoughts?


(Dhwanil Desai) #52

ofTata AutoComp Systems Limited.http://tacogroup.com/aboutus/index.htm Link: http://tacogroup.com/aboutus/index.htm

Hi Rahul,

I think Tata Greens is surely gettin recognized in the market. I have been moving around in the city asking people for their feed back on batteries and brands. In last month what I have gathered is

)- Exide is well entrenched in the market but not the only trusted name asAmaron and Tata are fast catching up.

)- In terms of warranty + guarantee for two wheeler maintenance free batteries, Exide gives 2 years of guarantee + 1 year of warranty while Amaron gives 2 years of guarantee + 2 years of warantee. Not sure of Tata Green.

)- Retail price of Sonic maintenance free battery is Rs.1650 while for Amaron it is 2100 ( I some how find the differential too high)

)- Tata Green also coming from Tata stable, mechanics/dealers are suggesting it to be equivalent to Amaron and Exide. However it is relatively new player in the market but can surely emerge as third force in duopoly market (they don’t seem to have industrial battery division though.)

)- In my ground work in last month, I have also come across audience which is sharply critical of one of these brands (may be incentive caused bias ) including Amaron.

Best Regards

Dhwanil Desai


(aware) #53

Are results of Exide hitting Amara raja?


(Dhwanil Desai) #54

Very decent results posted by ARBL again. Slight pressure on margins but not worrysome. They also plan to set up two wheeler battery unit with investment of roughly 100 crores.

Here is the link to results

http://www.bseindia.com/corporates/anndet_new.aspx?newsid=78c0dbb5-0ae0-4822-a069-02fcba10ed59

I think, it can post EPS 17-18 comfortably. Hence 270-280 seems to be fair value considering forward P/E of 15. However, I am holding it in my long term portfolio so not touching it for the moment.

Best Regards

Dhwanil Desai


(Subash Nayak) #55

I too had calculate it to be at around 270 odd in next 6 months time, which is 30 odd on and above today’s price of 240, (12% upside in 6 month, that too in a conservative estimate). PE re-rating (to 17-18 PE), and unexpected good quarter might push it further.

http://www.bseindia.com/corporates/anndet_new.aspx?newsid=78c0dbb5-0ae0-4822-a069-02fcba10ed59 Link: http://www.bseindia.com/corporates/anndet_new.aspx?newsid=78c0dbb5-0ae0-4822-a069-02fcba10ed59


(narendra ) #56

Amararaja reminds me of Bajaj and Hero Honda of old years.Both will be leaders , one with better growth until catch up.


(Saheer Sayyed) #57

Hi Dhwanil,

I am a newcomer to Equities, what do you mean by the following statement, br Saheer:

Disclosure:


(Raj Panda) #58

Hi Saheer,

Let me try to help you. It means, Dhwanil has bought ARBL at a price of 300 and he is disclosing this info here, so that it’s helpful to reader’s like us to judge if his views might be biased because of his purchase and already holding ARBL.

As human’s we tend to think differently when we already own something and it’s a good subject/bias to study and learn about :slight_smile:

Regards


(Saheer Sayyed) #59

Thanks Raj,

I was confused by the statement as the ARBL share has never crossed 267 on either BSE or NSE in its history !

http://www.edelweiss.in/company/Amara-Raja-Batteries-Ltd.html

So does that means Dhwanil paid a premium of 33 INR on top of the highest price !

BR,

Saheer


(Subash Nayak) #60

My friend,

There was a 2:1 split on 25th sep. So when someone is saying he bought at 300, he means 150 post split :slight_smile:

http://www.edelweiss.in/company/Amara-Raja-Batteries-Ltd.html Link: http://www.edelweiss.in/company/Amara-Raja-Batteries-Ltd.html