Motilal Oswal is bullish on Amara Raja Batteries has recommended buy rating on the stock with a target price of Rs 761 in its research report dated May 16, 2019.
Motilal Oswal's research report on Amara Raja Batteries
Revenues declined by 1% YoY to INR15.7b (our est. INR16.9b), impacted by lead price pass-through (in 40-50% of the business). The healthy volume growth in aftermarket (4W - 11-12% YoY, 2W - 18-20% YoY) and exports (15-20% YoY) was offset by ~10% YoY decline in automotive OEM and flat volumes in the industrial segment, even as telecom volumes declined 10-15%.
We estimate revenue/ EBITDA/PAT to grow 10%/15%/16% CAGR (FY19-21E). The stock trades at 18.8x/16.4x FY20E/21E EPS. Maintain Buy with a TP of INR761 (20x Mar'21 EPS).
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