Buy Amara Raja Batteries, target of Rs 696: Sharekhan

Sharekhan's research report on Amara Raja Batteries

Registered healthy volume growth in the automotive and industrial segment in Q3FY2023 and with support of 360 bps y-o-y expansion in gross margin, EBIDTA margin expanded by 300 bps y-o-y to 15%. Decided to hive off new-age business in a separate subsidiary to enhance focus and fund raising. The stock trades at P/E multiple of 10.2x and EV/EBITDA multiple of 4.6x its FY2025E estimates.

Outlook

We reiterate our Buy rating on Amara Raja Batteries Limited (ARBL) with a revised PT of Rs. 696, owing to its brighter outlook for batteries going forward and comfortable valuations.

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Amara Raja Batteries - 27 -01-2023 - khan