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Buy Amara Raja Batteries; Target Of Rs 950: Sharekhan

Sharekhan is bullish on Amara Raja Batteries has recommended buy rating on the stock with a target price of Rs 950 in its research report dated October 27, 2020.

Nov 2, 2020 / 03:04 PM IST
 
 
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Sharekhan's research repor on Amara Raja Batteries


Amara Raja Batteries Ltd (Amara) Q2FY21 results were better than estimates across parameters. Topline growth recovered to 14% yoy as both auto and industrial demand recovered; margins improved on operating leverage. Amara is expected to continue outpacing organized lead acid battery industry driven by new automotive OEM client addition and enhancing distribution reach in aftermarket. Telecom and UPS too have huge growth potential. Operating leverage and cost control measures would lead to margins remaining at higher end of historical band of 14-17%. Amara is a debt free company with healthy return ratios. Have raised earnings estimates for both FY21, FY22 on better Q2 results.


Outlook


Have also introduced FY23 earnings. P/E of 15.8x FY23 earnings is lower than long term historical average. Recommend Buy with revised PT of Rs 950.


For all recommendations report, click here


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first published: Nov 2, 2020 03:04 pm

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