Amararaja Batteries Limited: Powering Ahead


(Hitesh Patel) #81

agree fully. one can even make answers in bold just to differentiate the answers.


(Subash Nayak) #82

Hi Sunil,

Price anchoring is a deadly mistake one can make. The only price one need to look is the current price and is it worth buying at current price. What was its price, how much it has rose are of immaterial to a fundamental analysis guy. If there is undervaluation even after 5-fold rise in price, people will buy it, making the price rise further. And if a stock has fallen 90% from it top, it doesn’t become undervalued automatically.

What I feel is that companies like Hawkins/ARBL/Mayur/Astral/Unichem/Ajanta/Cera/Kajaria deserve to be in top 5 holding of a mid-cap heavy portfolio, (Each having its own reason)

Regards,

-Subash

ofthe :))

regards, Sunil


(Shashi) #83

What are you buying after selling ARBL ?

@subash What he mean is though earnings will grow at 20 25 % but the PE will remain same less chance of PE expansion so no bumper returns .


(Subash Nayak) #84

Hi Shashi,

I am not sure whether there will be PE expansion or not for ARBL. But as per my understanding there could be a small PE expansion because of the increased market share. But investing in such companies implies that you want to compound your invested money in a healthy 25-30% CAGR for good number of years.

Regards,

-Subash


(Hitesh Patel) #85

there seems to be some corporate developments in insurance venture of exide. there was the following announcement on bse today.

**Exide Industries Ltd has informed BSE that the Company, currently owner of 50% of the equity capital of ING Vysya Life Insurance Company Limited (IVL), has in principle decided to acquire the remaining 50% of the equity capital of IVL (26% from ING Group, 16.32% from the Hemendra Kothari Group and 7.68% from the Enam Group) for an aggregate consideration of Rs. 550 crores approximately, subject to regulatory approvals.

Post such acquisition EIL has in principle decided to identify and induct a new international player in the life insurance genre to infuse fresh equity into IVL (subject to regulatory approvals) for IVLâs expansion plans.**

anybody with any views on this development?


(Manish Madnani (Jaishrikrishna)) #86

Not the right time to blow up cash, i guess…

Mkt might take it as a -ve Black Swan

** Exide IVLâs expansion plans. **


(Manish Vachhani) #87

Citigroup downgrades Exide for diversification into insurance business

http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/exide-down-on-insurance-diversification-citigroup-downgrades/articleshow/18163604.cms Link: http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/exide-down-on-insurance-diversification-citigroup-downgrades/articleshow/18163604.cms


(Deepak Swamy) #88

Q3/Fy-13 Results out…

Total Income up 23.7% to 759.15 Cr from 613.84 Cr.
EBIDTA up 14.6% to 121.82 Cr from 106.31 Cr.
Net Profit up 22.7% to 80.91 Cr from 65.93 Cr.

EBIDTA margin is 16.1% v/s 16.4% (SQ-12) and 17.3% (DQ-11)
NET Profit margin is 10.7% v/s 10.7% (SQ-12) and 10.7% (DQ-11)

Total Raw material costs as a %ge to Income is 66% v/s 65.7% (SQ-12) and 66.4% (DQ-11)
Employee costs to Income is 4.2% v/s 4.2% (SQ-12) and 4.4% (DQ-11)
Other expenses to Income is 13.8% v/s 13.7% (SQ-12) and 11.9% (DQ-11)

Tax Rate 30% v/s 31.1% (SQ-12) and 32.7% (DQ-11)

9M/Fy-13 v/s 9M/Fy-12:
Total Income up 27.6% to 2171.67 Cr from 1701.29 Cr (Fy/11-12: 2373.26 Cr)
EBIDTA up 37% to 359.31 Cr from 262.24 Cr (Fy/11-12: 357.6 Cr)
Net Profit up 44.9% to 227.1 Cr from 156.78 Cr (Fy/11-12: 215.06 Cr)

Reported 9-month EPS 13.3 v/s 9.18 (Fy/11-12: 12.59)

On 28/01/2013, stock on BSE Closed at Rs. 301.50/- up 1%
(Result declared after market hours)


(hemant gupta) #89

decent results from amara raja. this is another stock that continues to surprise me. given how bad exide has been suffering from the margin squeeze, amara raja seems to have been delivering very consistent results. i believe the shift from exide to amara raja would continue to drive the stock.


(Maverick) #90

Members,

Exide industries has entered into an agreement with Shin Kobe of Japan (leading manufacturer of industrial and automotive batteries) which will provide them with technological assistance in manufacturing quality batteries with low cost.

The thing i was considered about is, there can be two effects: -

a) amara raja main advantage of superior technology leading to low costs will be diminished

b) This can see revival of Exide and exide being a leader in the batteries segment will try to maximize the gains.

Request fellow members to look at this perspective.

Link: - http://www.bseindia.com/xml-data/corpfiling/AttachLive/Exide_Industries_Ltd_050213.pdf


(NJ) #91

BSE website reports the following disclosure from the promoters of Amara Raja. Does this mean that the promoters bought back part of their pledged shares? or does Kotak now owns the shares and might be selling in the market? Stock has corrected substantially, but so has the market so can’t tell.

http://www.bseindia.com/xml-data/corpfiling/AttachLive/Amara_Raja_Batteries_Ltd_260213_SAST.pdf


(Gyan Roy) #92

Promoter bought back part of the pledged shares. Now only 1.6% of companies shares are pledged vs. 2.4% earlier.


(Tony) #93

Hi NJ/ Gyan,

There is some misunderstanding. The shares are pledged by the promoters for some facilities the bank may have given the company/promoters. The shares were given as security. There is no sale to the Bank, and so no buy back exists.

It only means that the loan or guarantees given by banks against the security of pledged shares has been released on the repayment of the loan or cancellation of guarantee given earlier by the bank.


(Ramakrishna) #94

Excerpts from Buy Report of IIFL

Charged up

Amara Raja Batteries Ltd (ARBL) is one of the best plays on the ensuing surge

in replacement demand for automotive batteries in the domestic market.

During FY09â12, passenger car sales in the domestic market registered a

CAGR of 18.2% and 2âwheeler sales witnessed a CAGR of 21.8%. With

replacement cycle for batteries in a passenger car of 30â36 months and that

of a switchâstart 2âwheeler of 24â30 months, substantial jump in replacement

demand can be seen in the near future.

As compared to past, 2âwheeler battery replacement market is likely to

increase in size. This can be mainly attributed to the rising proportion of

switchâstart 2âwheelers in the domestic sales. In a kickâstart 2âwheeler,

replacement of batteries was not essential as it was not used to start the

vehicle. However, batteries are a key for ignition of switchâstart 2âwheelers.

ARBL has gained a strong foothold in the replacement market for the

automotive with a steady increase in market share in the segment. Even with

the OEMs, the company has been able to get into its fold most incumbent

players and is in discussions to enter into tieâups with new entrants.

The industrial segment is mainly driven by demand for UPS led by

investments in IT industry and towers in the telecom segments. Battery

demand in the UPS segment, which has witnessed a 15% growth, is

expected to continue given that investments in computerization by India Inc

has been on a rise. While pace of new addition of new telecom towers has

slowed down, replacement of batteries in the existing towers is due which

will keep demand growth from the segment robust.

ARBL, to capture these growth opportunities is expanding capacities in all

segments by nearly 50% by H2 FY15. The company has been performing

better than Exide in the past few quarters on all counts. This has triggered a

reârating in the stock. We expect the performance to continue on both

revenue and profitability fronts with estimates of a revenue and PAT CAGR

of 22% and 26% respectively between FY12â15E. We initiate coverage with a

BUY recommendation and a 9âmonth price target of Rs340…


(Subash Nayak) #95

ARBL gears up for next growth


(Bhupesh) #96

Is Amara saying that next 2 Qs will have flatrevenueas they are capacity constrained ?

http://www.moneycontrol.com/news/results-boardroom/fy14-ebitda-margins-seen-at-15-16-amara-raja_871671-1.html


(Sandeep) #97

Amara Raja stock price factors in positives

Amara Rajaas stock has risen substantially by 87% in the last fiscal year outperforming the BSE 200 index

http://www.livemint.com/Money/h5tkdE9qgZMLAytTHl9eyK/Amara-Raja-stock-price-factors-in-positives.html


(Tony) #98

As per technical analysis, the stock has turned weak. It is presently very close to its 200 EMA of 245. The stock has given a sell signal in a market, when Nifty is trading at a high of 6169. The next target is 235-240 and thereafter 220. If it breaks 220 it will begin trading below its Bullish Support Line marked in blue. It will turn very weak and then it can fall all the way to 205 and even touch 180.

http://chartink.com/pointfigure/AMARAJABAT.html

A patient investor can get a good entry point. Let us wait and see what the market has to say of Amara Raja.


(Prashanth) #99

Amara Raja took the Market share from Exide in 09-10 when Exide was constrained by capacity constraints. Are we going to see the same now? . Is capacity of Amara Raja is in maximum load esp in Telecom and Industrial ?. I could not find any information regarding this. If it is so, then next 2-3 quarters results will be subdued is my prediction. Can any one help me here?


(Rudra Chowdhury) #100

Good write up from Vishal on ARBL

http://www.safalniveshak.com/stocktalk-amara-raja-batteries/

And a SEBI report on price rigging from ARBL dating back to 2001.

http://hindu.com/businessline/2001/08/26/stories/022618am.htm