The company’s earnings before interest, tax, depreciation and amortisation (Ebitda) margins expanded 130 basis points (bps) year-on-year (YoY) to 16.2 per cent, driven by lower raw material costs and impacted by higher-than-expected other costs.
Net revenue from operations during the quarter grew 3 per cent at Rs 1,748 crore against Rs 1,695 crore in the corresponding quarter of the previous fiscal. Profit after tax (PAT) rose 26 per cent to Rs 164 crore on YoY basis.
The company’s automotive and industrial batteries businesses reported healthy volume growth during the quarter, except automotive original equipment manufacturers (OEMs) and telecom segments.
The management said the replacement demand for AMARON, POWER ZONE and QUANTA batteries across market segments helped the company achieve healthy volume growth. Exports to countries in the Indian Ocean Rim geography continue to gain traction. OE and telecom sectors continue to experience demand slowdown, it added.
“The automotive sector is facing challenges of demand uncertainty due to social, regulatory and technological changes. The coming months will provide clarity on the medium and long-term growth trajectory of this sector. We are closely tracking the emerging opportunities and will continue to leverage our strengths to tap into these opportunities at the right time,” said Jayadev Galla, vice chairman & managing director, Amara Raja Batteries.
Analysts at Dolat Capital remain positive about the Indian battery market, given an expected improvement in the replacement demand, as primary vehicle sales were strong in the past three years and continued market share gain from unorganised players, after the GST implementation and recovery in automotive sales expected from FY21.
Amara Raja Batteries supplies automotive batteries under OE relationships to Ashok Leyland, Ford India, Honda, Hyundai, Mahindra & Mahindra, Maruti Suzuki, and Tata Motors.
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