Amara Raja Q3 Review - Margins Weak; Valuations Fair: IDBI Capital

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IDBI Capital Report

Amara Raja Batteries Ltd.’s net sales was 7% ahead of our forecast; however, its Ebitda margin was 158 basis points lower than our estimate.

Its sales increased by 12% YoY to Rs 19.6 billion led by growth in original equipment manufacturer, aftermarket and exports segments.

However, gross margin contracted 164bps YoY to 34% and hence, Ebitda increased only 8% YoY to Rs 3,069 million.

Sharp jump in other income (up 175% YoY to Rs 325 million) resulted in stronger growth in net profit to Rs 1,937 million (up 18% YoY).

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