Any comments on low promoter holding?
Capex plans for future?
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Can you please translate on what it says?
Thanks
Saravanan
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Before get into news, Sakshi news channel own by Chief minister Jagan Mohan Reddy. Mean While Galla Family support TDP which is opposite to YSRCP. This news only published in Skashi Newspaper and it claiming that PCB health has taken blood samples from the Amara raja battery closed factory workers and found some extra percentage of lead in their blood. So Amarraja bettery repersentitve denied the news so the court postponed the judgement further and given PCB authorities to run test on workers.
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Hello,
Are you saying that observations/issues raised by PCB are false/wrong? If yes, then the company should have already closed the case by providing proper data rite…
We are not sure what is really happening there. Why is court postponing the case multiple times? Are they asking company to take some additional steps/corrective measures or come up with a plan to solve this problem?
Not sure if the company is just denying the observations or are they taking any steps to solve this issue?
High lead traces in employees blood samples is definetely a big concern (whether people or environment).
Disclosure: Invested
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True. Even if the action is being taken against them because of political vendetta while other defaulters are being treated softly, it still doesn’t bode well for them if employee blood samples show high lead levels. Basically, they are violating the pollution norms which they may not be able to defend in court.
Disclosure: No position but tracking.
In the last hearing these are the points raised by PCB
1.polluting air, which resulted in the presence of high levels of lead in the blood of almost all its employees and people of the surrounding villages
2.discharging untreated waste water into the drains and untreated sewage into the storm water drains, and causing soil pollution.
And PCB also claimed that they are not getting proper response from the Amar raja company. So PCB asked a special permission from the court to conduct more test. The court granted the permission and postpone the judgement to next hearing. As off now PCB not submitted any proofs.
Disclosure: Invested
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Recently ABL invested in this company
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Amara Raja announced plans to invest in InoBat Auto, a European technology developer and manufacturer of premium innovative batteries for E-mobility.
Press Release
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I couldn’t understand anything from their acquisition description. No mentions on what kind of “innovative” technologies they are expert in. Just a lot of repetitive lucrative words (at least 4 times) like below:
““Today’s announcement is strategically important for InoBat and its planned gigafactories across various parts of Europe. It shows that unique collaborative partnerships are vital for driving forward the uptake of E-mobility solutions globally, including the emerging markets. Furthermore, it paves the way for our further expansion and the application of our own “cradle-to-cradle” approach.”
New Generation 10 year view (Total integrated power solutions not just battery oriented. Mighty aspirations)
Exide also seems to be learning from it’s past mistakes
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True … Amara Raja is where Exide was in 2018 … Exploring and experimenting
Now 3 years later Exide has Lithium battery assembly factory in India ( 80% equity share) and has supplied to Tata Power and Few electric 3W companies … and is in discussion with other EV players
++ it has accounced that they will enter cell manufacturing in coming year as they get money from Insurance company sale…
Amara Raja has to move fast
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True that, one look at Inobat website and you know it is still in startup phase buliding labs and factory. Have backing of some marquee investors, actual product manufacturing and commercial sales is some time away.
Are there any updates on PCB issue. I believe they had previous put a closure order.
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High Court of Andhra Pradesh has extended the interim suspension of said closure orders of APPCB and the next hearing is scheduled on January 24, 2022.
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It seems Court is also upset with PCB after it fails to submit reports again in January
There is a high possibility that case may go in favor of Amara Raja tomorrow.
Once the Court case issue is solved, Amara raja might see some recovery
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I had an interesting discussion with @Rafi_Syed about Amara Raja and am trying to capture the same on VP. Prices have gone down by 40%+ from a peak of ~1000 in January 2021.
That was also the time of peak operating margins, since then margins have come down (for both Exide and Amara Raja) due to increase in lead prices.
They also ran into environmental compliance problems starting in Q4FY21.
All this being said, they are trading at ~16x P/E on trailing profits (which are depressed due to cyclical low margins). On a normalized PAT margin of ~10%, they are trading at ~11x P/E.
Also, the next generation has been inducted in leadership roles and are prioritizing investments in lithium ion batteries.
Comparison with exide: Growth and margin performance has been better than Exide.
During the cyclical auto downturn, they managed to grow sales and profits.
So it seems company is investing in future technology, gaining market share and trading at reasonable valuations. A cyclical uptick along with a resolution of their compliance problems can benefit company’s performance. Key risk remains the high level of investment required in building lithium ion capabilities which will hamper free cash generation.
Disclosure: Invested (position size here)
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Galla Jaydev the promoter of Amara Raja and sitting MP from TDP
There is fight going on between Jagan Reddy - YSRCP and Amara Raja
There was rumor that due to ongoing tussle between ruling and opposition Amara Raja thinking of moving to nearby industrial city Chennai
APPCB overhang
AP government taking back the lands given to them at throwaway prices by previous government (TDP)
Please factor in these developments.
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