Buy Amara Raja Batteries: target of Rs 1060 : Sharekhan
Sharekhan is bullish on Amara Raja Batteries recommended buy rating on the stock with a target price of Rs 1060 in its research report dated December 08, 2020.
December 09, 2020 / 01:45 PM IST
Sharekhan's research repor on Amara Raja Batteries
Amara well-positioned to gain market share in lead acid battery business by adding clients and widening replacement distribution network. EBITDA margins to remain strong at 17.5% in FY22E driven by favourable product mix, led by a higher share of revenues from replacement segment, operating leverage and cost-cutting measures. Stock attractively valued with P/E multiple of 18.3x and EV/EBITDA multiple of 9.3x its FY2023E estimates, and is at a 20-25% discount to its long-term average multiples.
We maintain our Buy rating on Amara Raja Batteries (Amara) with a revised PT of Rs. 1,060, factoring better multiples owing to a better outlook for automotive and select industrial segments (telecom and UPS).
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