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Last Updated : Jul 22, 2019 05:17 PM IST | Source: Moneycontrol.com

Accumulate Amara Raja Batteries; target of Rs 684: Dolat Capital

Dolat Capital recommended accumulate rating on Amara Raja Batteries with a target price of Rs 684 in its research report dated July 22, 2019.

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Dolat Capital's research report on Amara Raja Batteries


Amara Raja reported strong results in 1QFY20 in challenging conditions. Net profit jumped 25% YoY to ` 1.4bn, due to sharp margin expansion of 300bps and a low base. We remain positive about the Indian batteries market, as we expect 1) replacement demand to further improve, given healthy primary sales in the past three years, 2) a market share gain from unorganized players, after GST, and 3) an uptick in the nascent e-rickshaws /solar batter. We forecast Revenue/EBITDA/PAT CAGR of 8%/11%/10% over FY19-21E.


Outlook


At CMP, the stock trades at 19/18x for FY20/21E EPS (vs 5 year historical multiple of 28), we recommend an Accumulate rating, with a TP ` 684 (20x FY21E EPS).


For all recommendations report, click here


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First Published on Jul 22, 2019 05:17 pm
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