Amara Raja Batteries Limited, a part of the famed Amara Raja Group, is a multi-national battery company which primarily manufactures batteries for automotive and industrial applications.
The market capitalisation of Amara Raja Batteries Limited, as of August 13, 2018, is a little over Rs.14,000 crore.
Company’s Wealth and Recent Performance
- For the quarter ended on June 30, 2018, the company reported its total income to be at Rs.1,792 crore as against Rs.1,684 crore reported for the June quarter of the previous fiscal year. This translates into a growth of roughly 10%.
- The battery business of the Amara Raja Group posted a net profit of Rs.113 crore for the quarter - an increase of 13% with respect to the profit reported for the same quarter of the previous fiscal year.
- The earnings per share also improved marginally to stand at Rs.6.62 in comparison to Rs.5.85 reported at the end of Q1 FY18.
- Considering the sales performance of the battery business, it achieved a strong growth in volume across all the major business segments. The battery replacement market also witnessed a similar growth. Considering the international business of the company, the sales in South-East Asia and Middle-East contributed well to the international sales.
Amara Raja Batteries Limited Stock Trends in 2018
- On January 2, 2018, the opening price of Amara Raja Batteries shares was Rs.832 on the National Stock Exchange. In the first half of the month, the scrip gained roughly 5% to touch the Rs.860 mark. In the second half, however, the share price went down to end the month of January at Rs.810.
- In February, the Indian markets were quite volatile owing to the uncertainty caused by turbulence in the international markets. As a result, the stock price of Amara Raja Batteries Limited gained close to Rs.45 in the first half of the month, only to shed those gains by the end of February. The closing price on February 28 was Rs.822.25.
- Through most of March, the Amara Raja Batteries shares were traded at levels varying from Rs.760 - Rs.810. In April, however, the share price of the company went up to surpass its previous levels seen at the start of the year. On April 30, 2018, the stock price of Amara Raja Batteries was Rs.861.40 and in early May, the scrip reached its 52-week high at Rs.902.85.
- Things appeared to be quite positive in the first half of May as the stocks retained their bearings at levels above Rs.850. In the second half of the month, the share price plunged dramatically and lost more than 10% in two weeks.
- This downward run was seen in the month of June as well. The stock price of Amara Raja Batteries went below the Rs.750 mark to end the month at Rs.726.15. Starting in July, the shares commenced a recovery which led to the investors regain their previous losses to a certain extent. The scrip ended the month at Rs.823.85. In early August, a final dividend of 215% was announced by the company.
Amara Raja Batteries Limited Stock Trends in 2016 and 2017
- At the start of 2016, the share price of Amara Raja Batteries Limited was varying at levels around Rs.860. The price went down by a little over 5% in January, only to follow it with a bullish trend through the course of February and March. An interim dividend of 425% was announced in late March which saw the scrip venture into the Rs.900 region.
- The price continued to rise in the month of April as well with the shares eventually crossing the Rs.950 mark. For most of May, the Amara Raja Batteries Limited shares traded at levels around Rs.950. In the final week of the month, however, the shares lost more than 10% to descend back into the Rs.800 territory.
- The shares attempted to recover in the months of June, July, and August. The investors were quite cautious as the stock price moved steadily closer to the Rs.900 mark. In late July, the scrip managed to achieve this feat and through most of August, the shares traded hands at levels varying from Rs.900 - Rs.930.
- The price rose sharply in the final week of August and by early September, they had soared into the Rs.1,000 region. The shares stayed at those levels until demonetisation, post which they lost 5%. Eventually, the shares descended back into the Rs.900 region. In December, the prices slipped further to end the year at Rs.870.30.
- 2017 proved to be a rather precarious year for the investors. While other stocks in the year made excellent gains, the Amara Raja Batteries shares suffered quite a bit. The scrip commenced the year at levels close to Rs.890. Over the course of February, the shares lost around 5% but managed to recover the same in March.
- Things didn’t change significantly in the month of April. The share price in this period was above Rs.860 and it stayed that way through most of May as well. In the month of June, the shares commenced a bear run which resulted in massive losses for the investors.
- In late July, the company announced a final dividend of 425%. By this time, the shares were trading at levels close to Rs.840. In August, the prices dropped further to enter the Rs.700 territory. In September, the shares took a nosedive and the scrip went down to be traded at levels close to Rs.700. Through most of October, the shares were seen changing hands at levels varying from Rs.670 - Rs.690. In the same period, the share price of Amara Raja Batteries Limited hit its 52-week low at Rs.664.55.
- The prices rose in the November and December to end the year on a positive note. Investors were optimistic in the closing days of the year as the shares ascended back to their previous levels at Rs.830. The closing price on December 29, 2017, was Rs.840.20 on the NSE.
Should you invest in Amara Raja Batteries Limited?
- Amara Raja Batteries Limited is an Indian automotive ancillary company which is mainly engaged in the business of manufacturing batteries for automotive and industrial applications. Its major brand is Amaron which happens to be the second largest selling battery brand in India.
- Considering the financials of the company, Amara Raja Batteries Limited reported a profit of Rs.113 crore - up by 13% with respect to the profit reported for the same quarter of the previous year. The company is also in the process of setting up a new greenfield automotive battery plant to boost its production.
- Considering the performance of the stock, 2017 was a dull year for the investors. 2018 hasn’t been any great either. The stock hasn’t moved up to deliver significant returns in the year. Instead, the share price has been rather volatile.
- If we are to consider the company with respect to its peers, there are better players in the automotive ancillary sector like Motherson Sumi and Exide India. Their stocks are available at considerably lower prices and their sales turnover and profits are considerably higher.
- If you are looking to invest in this company, it is strongly recommended that you do your own research before investing.
Amara Raja Batteries Limited is an Indian automotive ancillary company which is primarily focussed on manufacturing automotive batteries. It is also involved in manufacturing batteries for industrial applications and produces a wide variety of such batteries. It has an international joint venture with Johnson Control Inc. Its main battery brand is Amaron, which is the second largest selling automotive battery in India.
History of the Company
Amara Raja Batteries Limited was incorporated in the year 1985 as a private limited company and was converted into a public limited company in 1990. The company commenced its operations by manufacturing sealed, maintenance-free, lead-acid batteries for industrial applications. The company then entered into a technical agreement with GNB Incorporation. Over the years, it consolidated its position in the industrial batteries segment. In 1998, it branched out into the automobile battery segment, thus expanding its existing production. The next decade mainly saw the company improve its automotive battery offerings and consolidate its position in the Indian market.
Management of the Company
Dr. Ramachandra Naidu Galla - Chairman
Dr. Galla presently serves as the Chairman of Amara Raja Batteries Limited. Prior to this, he served as the Managing Director of the organisation and is primarily responsible for setting up the batteries division of the Amara Raja Group. In fact, under his leadership, Amara Raja Batteries Limited became the first company in India to manufacture sealed, maintenance-free, valve-regulated lead acid batteries for industrial applications. Before turning into a full-time entrepreneur and the founder of the Amara Raja Group, he worked with M/s Sargent & Lundy and US Steel Corporation. He has also been associated with various other organisations like Andhra Pradesh Gas Power Corporation Limited and Mangal Industries Limited.
Mr. Jayadev Galla - Vice Chairman and Managing Director
Mr. Galla presently serves as the Managing Director and Vice Chairman of Amara Raja Batteries Limited. As the MD of the batteries division of the Amara Raja Group, he is primarily responsible for overseeing marketing, sales, business development, and strategic planning operations. He has played an instrumental role in establishing Amara Raja Batteries Limited as an international player in the automotive batteries segment. He is also credited with establishing the joint venture between Amara Raja Batteries Limited and Johnson Control Incorporation.
Mr. T. R. Narayanaswamy - Independent Non-Executive Director
Mr. Narayanaswamy presently serves as an Independent and Non-Executive Director of Amara Raja Batteries Limited. He has held this position since June 2009. In addition to this, he serves as the Executive Director of Tattva Group of Companies. He is primarily involved with the oil & gas sector, having founded and spearheaded Results Marine Private Limited. He graduated from the Loyola College, the University of Madras with a Bachelor’s degree in Commerce. He also holds a Masters’ degree in Commerce from the University of Madras.
Amara Raja Batteries Limited Listings in NSE, BSE, and Indices
The equity shares of Amara Raja Batteries Limited are available to the general public for trading on the National Stock Exchange of India Limited and the Stock Exchange, Mumbai. The respective symbols for the same are as follows:
- NSE Code: AMARAJABATEQ
- BSE Code: 500008
- ISIN: INE885A01032
- Sector: Auto Ancillaries - Battery
The company does not comprise the Nifty 50 or the BSE SENSEX. However, it does comprise other important indices such as:
- Nifty 200
- Nifty 500
- S&P BSE 200
- S&P BSE 500
- S&P BSE LargeMidCap
- S&P BSE MidSmallCap
- S&P BSE MidCap
Amara Raja Batteries Limited
Karakambadi - 517-520
Tirupati, Andhra Pradesh
Contact number: +91-877-2265000
Stocks vs. Mutual Funds: here's what we recommend
Stock market investments require a lot of research and knowledge. They do not generally offer any tax benefits and are regarded as high-risk investments. Hence,it is crucial to have a diversified portfolio. At Bankbazaar, we encourage our readers to invest on mutual funds.It doesn't require a lot of knowledge and equity linked mutual fund schemes offer tax benefits. Additionally, since mutual funds comprise stocks from multiple companies, they help in building a diversified portfolio.
The contents of this post/blog does not constitute financial or other professional advice nor does it imply in any manner a principal-agent relationship, and is not a professional advice on a specific financial matter.