Motilal Oswal's research report on Amara Raja
Amara Raja (AMRJ)’s 1QFY24 performance was weak as it reported lowerthan-estimated EBITDA at INR3.5b (vs. est. 4.1b) despite in-line revenue. This was due to weak mix led by high trading content (15-16% of sales), high insurance cost impact of INR60-70m and contribution of new energy business (~4% of revenue) during the quarter.
Outlook
We cut our FY24E/FY25E EPS by 9.0/8.5% to factor in the likely slowdown in replacement demand and weaker mix. We reiterate our Neutral rating with a TP of INR665 (premised on 12x Sep’25E EPS).
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