Buy Amara Raja Batt; target of Rs 308: Sunidhi Securities

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Buy Amara Raja Batt; target of Rs 308: Sunidhi Securities

Sunidhi Securities is bullish on Amara Raja Batteries and has recommended buy rating on the stock with a target of Rs 308 in its February 13, 2012 research report.

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Sunidhi Securities is bullish on Amara Raja Batteries and has recommended buy rating on the stock with a target of Rs 308 in its February 13, 2012 research report.

"Incorporated in 1985, ARBL, a company with 26% equity each from Galla Family and Johnson Controls Inc, USA, is the technology leader and is one of the largest manufacturers of lead acid batteries for both industrial and automotive applications in the storage battery industry. ARBL has an integrated automotive battery manufacturing facility at Tirupati in south India.  In India, ARBL is the preferred supplier to major automobile OEM, telecom service providers, telecom equipment manufacturers, UPS sector (OEM & Replacement), Indian Railways and to power, oil & gas among other industry segments. ARBL is a leading manufacturer of automotive batteries under the brands - Amaron™ and Powerzone™. Amara Raja Batteries (ARBL), a leading manufacturer of lead acid batteries for industrial and automotive applications has produced excellent results for Q3FY12 & 9MFY12."

"During Q3FY12, sales rose 44.0% to Rs612.2 crore (Rs425.0 crore). PBIDT at Rs111.5 crore (Rs70.1 crore) rose 59.1%. Net profit advanced 66.0% to Rs65.9 crore from Rs39.7 crore in Q3FY11. (YoY).  OPM stands enhanced to 18.2% from 16.5% and PAT margin moved up to 10.8% from 9.3% in Q3FY11. EPS for Q3FY12 stands at Rs7.7 Vs Rs4.6 in Q2FY11. Sales during 9MFY12 rose 34.7% to Rs1696.7 crore (Rs1259.7 crore). PBIDT at Rs269.8 crore (Rs191.9 crore) rose 40.6%. Net profit rose 46.5% to Rs156.8 crore from Rs107.0 crore in 9MFY11 (YoY).  OPM enhanced to 15.9% from 15.2% and PAT margin moved up to 9.2% from 8.5% in 9MFY11. EPS for 9MFY12 stands at Rs18.4 Vs Rs12.5 in 9MFY11."

"We recommended ARBL at Rs194 with a target price of Rs240 vide our Buy Report dated 15 December 2011. In view of the robust Q3FY12 results, we are revising our EPS projection to Rs24.6 from earlier Rs20.8 and target price to Rs308 at which the share will trade at a P/E of 12.5," says Sunidhi Securities research report.   

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