Subscribe to PRO at just Rs.33 per month. Use code SUPERPRO
Last Updated : Aug 11, 2020 04:17 PM IST | Source: Moneycontrol.com

Buy Amara Raja Batteries; target of Rs 803: Emkay Global Financial

Emkay Global Financial is bullishsh on Amara Raja Batteries has recommended sell rating on the stock with a target price of Rs 803 in its research report dated August 07, 2020.

Broker Research
Representative image
Representative image
  • bselive
  • nselive
Todays L/H

Emkay Global Financial's report on Amara Raja Batteries

Q1FY21 revenue stood at Rs11.5bn, down 37% yoy but better than the estimated 56% fall. Revenue was aided by flat growth in the telecom segment and pickup in auto replacement demand in May-Jun’20. EBITDA margin at 13.2% beat our estimate of 11.3%, led by better-than-expected revenue and cost reduction efforts. AMRJ was able to retain the benefits of low lead prices with no pass-through in the replacement market. Amid weakness in the auto sector in FY21E, a swift recovery is expected in the battery segment, led by a pickup in replacement demand. Volumes should improve gradually in Industrial/OEM segments ahead. Also, we expect market share gains to continue for AMRJ.


We expect a 10%/15% CAGR in revenue/earnings over FY20-23E, with average ROCE of 24% and FCF of Rs5bn/year. We retain Buy with a TP of Rs803 (Rs732 earlier), based on 15x Sep’22E EPS (Mar’22E EPS earlier). We maintain EW stance in sector EAP.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

First Published on Aug 11, 2020 04:17 pm