The AP High court has suspended the closure notice issued to Amara Raja Batteries by the AP Pollution Control Board. This positive news will help the company revive.
2 reasons
- The company is not making any significant investment in Lithium Ion battery and the market feels that this would be bad for the company in the future.
My thought : EV is not going to make a big dent in automobile segment in India for years to come. So, the company would be fine with Lead Acid battery.
- Clarios is selling 1.7 Crore shares at a price of Rs 746. This is a very temporary thing and hopefully the stock should recover in less than a few days from the overhang of supply.
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Exide making any investment in lithium ion?
Amara Raja
Highlights from the management interaction
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Growth in Auto segment volumes in 4QFY21 was driven by: a) 2Ws (50% YoY growth) as volumes from OEMs doubled and Aftermarket grew 20-25%; b) 4Ws (20% growth) led by Aftermarket (+17% YoY), OEMs, and exports (20-25% YoY growth); and c) Inverters (+100% YoY).
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Growth (20%) in the Industrial segment was driven by UPS (20-25% growth) and Telecom (10-15%).
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There was no price increase in the Replacement market in 4QFY21, however, it hiked prices by 1-1.5% in 1QFY22.
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It lost 4-5 days as its factory was shut due to a closure notice from the Andhra Pradesh Pollution Control Board (APPCB). Post stay on this order by the court, the plant is now fully operational, and AMRJ is working towards correcting the observations made by APPCB.
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AMRJ has completed expansion of capacities in 4Ws/2Ws (by 1.5m/3m units to 14m/20m units). Capex in FY22 is estimated at INR4-4.5b (v/s ~INR5b in FY21).
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It is working on PLI for advanced chemistry cell batteries and awaiting detailed guidelines from the government.
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where to find AGM recording?
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Cannot read the full article since it is behind a paywall, but pretty late in the day IMHO. They should have entered the EV space at least 5 years back, would have got a head start by now. It was very clear which way the world was heading.
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I donât think it is late, their approach is probably technology transfer and scale up production to suit domestic needs. The EV space is for the next 2-3 decades, Amar Raja (& Exide) will do very well in this space
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May be an ignorant question, but any reason for the big jump of stock-in-trade in FY21? Exide doesnât have such a number (maybe due to its integration?)
Any reason the stock is falling? I donât see any change in fundamentals except Panther ARBL selling their holdings. Good time to accumulate?
Amara Raja Batteries slips 1.5% after Andhra Pradesh HC extends suspension orders of APPCB by 4 weeks on companyâs plants
Next. court hearing :scheduled on August 16, 2021
Disc: Not Invested. Tracking
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Amararaja at lifetime average PE.
Triggers for growth:
*After market demand to show.
*Stricter pollution norms, more new cars on the road.
*Good cash position
*5G telecom demand
*2W EV demand
*Govt push for Solar energy
On going Capex :
âIn keeping with the growing
demand, the Company
invested H 418 crore,
from internal accruals, for
augmenting capacity of its
4-wheeler and 2-wheeler
batteriesâ
Rs.948 Cr of Capex in Fy21.
Point being, the business is on a growth footing. Inspite of cross political firing.
More snippets from the recent AR which give me hope for improved numbers in the years to comeâŚ
An avalanche of after market demand that will ensue as described below:
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log 9 seems to be involved in nano technology. Can anyone help on how this investment will be relevant to the company ?
thanks
Saravanan
NiceâŚ
Log9 is doing great research, founded by IITians. Their work will help Amararaja with EV adoption. The description of the work they are doing gives âforward lookingâ vibes. But, whatâs important is that Amararaja is on war footing to capture EV market for energy storage.
Log9
What are we building?
Log 9 Materials is using its core competence in Graphene nanotechnology to develop advanced energy storage technologies from electrode materials, cell to pack level. Our Rapid Charging Battery packs solve the challenges in adoption for the 2W and 3W electric vehicle platforms while our Aluminum Fuel Cell technology is targeted towards the electrification of long haul, heavier vehicles.
Electrification of vehicles specially for commercial use ranging from 2W, 3W to LCVs to HCVs will not only have a significant positive impact on the environment, but it will lead to huge cost savings as well. However, different vehicle platforms have unique requirements and hence there cannot be a one-type fit all battery technology.
Intra City 2 Wheelers and 3 Wheelers segment is witnessing the largest EV adoption in India currently, however, the potential is much larger. Quick charging and higher battery life can significantly increase the growth of EV adoption. As you might be aware that unlike large vehicles, quick charging in 2W is limited by battery capacity rather than the grid. A normal 15-20 A plug point in our houses is sufficient to charge a 2W in less than 15 minutes however current available EV 2Ws in the market require at least 1.5 hours (only ather) and generally 3-5 hours for a full charge.
Log9 has been able to develop a 2W and 3W battery pack utilizing our Supercapacitor expertise which could be charged in 10-15 minutes and offers a battery life of more than 15 years. We have already started commercial pilots with leading last mile players like Shadowfax, Amazon, Delhivery, Vogo, etc and have already received LOIâs for more than 11,000 2W batteries and 12,000 3W batteries for the commercial phase starting in Oct '21.
Long Haul LCVs and HCVs including buses are extremely difficult to be electrified using the conventional Li-Ion batteries. For the kind of range required, the total weight of the battery required will take away the entire load bearing capacity of the vehicle. Hence, Log9 has developed the Aluminum Fuel Cell technology which provides the benefits of the high energy density of fuel cells along with a solid, stable and recyclable fuel. The technology is due to be demonstrated next year first as a stationary power generation system followed by vehicular integration with leading EV OEMs in India."
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Lic has been consistently increasing its stake in Amararaja. Now they hold 7%.
AP high court extends APPCB closure order suspension, next court hearing on Oct 28th 21.
Has anyone done any work on the private promoter entities? any thoughts generally?
Rough notes from a recent CNBC interview -
- 15-17% CAGR revenue in 5 years
New energy solutions
- to invest in Li-ion battery tech
- Li-ion plant investment $1bn
Lead acid business -
- Expect atleast a decade of strong growth. Address these markets internationally. Trying to build strong presence in SE Asia & MEA.
- Inorganic growth - domestically & internationally (acquisitions?). Cannot disclose any names at this point
On EV
- On margins profile - Margins are unknown today
- Will study Chinese and European markets to understand profitability.
- Aspire to setup 10 GW factories over the 8 - 10 years.
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