Amara Raja Batteries, the industrial and automotive batteries manufacturer, is expected to report strong earnings for July-September quarter that will be announced on October 28. Profit is seen rising 26 percent year-on-year to Rs 127 crore and revenue is likely to jump 13.5 percent to Rs 1,210 crore during the quarter, according to average of estimates of analysts polled by CNBC-TV18.
Analysts expect strong revenue growth to continue due to growth in replacement segment. Demand revival from auto OEMs (original equipment manufacturer) and replacement segment may drive growth.
Operating profit during the quarter may increase 17 percent to Rs 217 crore and margin may expand 60 basis points to 18 percent compared to year-ago period due to lower raw material cost.
The company has been showing pure operational improvement in last many quarters. EBITDA margin in Q1FY16 at 18.2 percent was highest since Q4FY10.
Average lead costs have declined 9 percent on sequential basis. Analysts expect positive impact of this with one quarter lag. Commissioning of new tubular battery plant by January 2016 may also reduce costs, they feel.
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