Please dont look at sales figure as its driven by gas sourcing business, which doesn’t drive profitability. You can go through the Aegis thread to understand key business drivers.
Lithium ion is a fast evolving space where its hard to foresee how future will play out. My bet on Amara is largely on their core business of lead acid batteries, which is going to be a major profit driver for the foreseeable future, and management’s focused intent on building their lithium ion business without bloating their balance sheet by outrageous capex spends. Just to give an example of this, Amara already does 100 cr.+ quarterly sales in the new business segment (FY23 sales was 250 cr.), and its profitable. At this rate of growth, in a couple of years this new business segment will contribute >10% to their overall sales, and will be decently profitable. And in terms of valuations, its very cheap.
It has done decently, YTD folio is up ~45% with deep value bets being up ~96%. I share the portfolio performance at the end of a year, and plan to continue doing that.
AR23 wasn’t very informative, but the previous ARs provided good insights on their product segments. Also, management talked about these things at the AGM, I still need to digitize my notes. Once I get time, I will share it on Geekay thread. You can see the product level breakup until FY22 below.
Once we are close to peak earnings in cyclicals, PEs start to look very low, but my observation in cyclicals has been that earnings collapse during a downcycle. In my understanding, the paper downcycle started earlier this year, with paper imports putting a cap on realizations. Also, paper cos had a huge tailwind in 2021-23 due to lower imports. I generally get interested when PB for paper cos fall below 1x, currently thats not the case for majority of paper cos.