Sharekhan's research report on Amara Raja Batteries
Q4FY22 results were below expectations due to continued contraction in EBITDA margin, led by input cost inflation. We expect gradual recovery on EBITDA margins for Amara and thus, have cut earnings estimates by 19%/30% for FY23E/FY24E respectively. The stock trades below its historical average at P/E multiple of 12.6x and EV/EBITDA multiple of 5.5x its FY24E estimates.
Outlook
We maintain our Buy rating on Amara Raja Batteries Limited (Amara) with a revised PT of Rs.629, owing to stock price correction, a brighter demand outlook for batteries, and comfortable valuations.
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