Neutral Amara Raja; target of Rs 630: Motilal Oswal

Motilal Oswal's research report on Amara Raja

AMRJ’s 3QFY23 earnings were driven by softening of RM costs and good volume growth across the segment. Lead prices have started rising, and may adversely impact AMRJ partly from 4Q onwards. It is investing in li-ion cell manufacturing plant, with the first phase of 2GWH expected to commence in FY26, though it is yet to decide on a technology partner for this foray. We raise our FY23E/FY24E EPS by 10%/5% to factor in the benefit from stronger-than-expected volume growth and higher-than-estimated RM benefit.

Outlook

We reiterate our Neutral rating with a TP of INR630 (12x Dec’24E EPS).

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Amara Raja - 27 -01-2023 - moti