Auto ancillary stocks had a great run in the last week on the back of lower lead prices. They are also enjoying the advantage of not being restricted to supply only to new vehicles.
Amara Raja in particular, hit a lifetime high after it announced strong first quarter earnings. Suresh Kalyan, chief financial officer, Amara Raja expects the company’s topline to grow by 15-18% in FY13. "We expect to grow our top line by about 15-18% in FY13 and an equal proportion at the bottom-line too. Our expectation is that our operating margins should be in the range of 15-17% going forward," he told CNBC-TV18. He pointed out that the company’s margin expansion was aided by volume growth in most of the segments it operates in. "We clocked about 15% growth in industrial battery division and about 25% growth in the automotive battery division. We expect these margins would stay intact backed by our growth plan," he elaborated. Below is the edited transcript of Kalyan,’s interview with CNBC-TV18. Q: Your margins hit the highest level in the past 11 quarters we understand in Q1 FY13. What led to this high margin performance for the company, whether it was an aberration or whether we can see this to continue at the same level or may be even better it? A: The margin expansion is primarily backed by volume growth in most of our segments. It grew quite well in Q1 in industrial and automotive battery division. We clocked about 15% growth in industrial battery division and about 25% growth in the automotive battery division. We expect these margins would stay intact backed by our growth plan. Q: How much more do you think you can expand both revenues and margins in your battery business? A: We expect to grow our top line by about 15-18% in FY13 and an equal proportion at the bottom-line too. Our expectation is that our operating margins should be in the range of 15-17% going forward. Q: Is this with reference to batteries only or overall? A: It is only batteries because we are currently only in batteries business. Q: What would be the sustainable volume growth with regards to Amara Raja for the remaining part of FY13 and where exactly would you see the maximum traction come from? A: We believe that we can clock about 15-18% volume growth for the company as a whole.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
