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Amara Raja Batteries has moved higher by 8% to Rs 1,052, also its lifetime high on the NSE, after the company reported a 15% year on year (Y-o-Y) jump in net profit at Rs 122 crore, in line with an average analyst estimates, for the quarter ended June 30, 2015 (Q1FY16). The company had posted a profit of Rs 106 crore in the same quarter last year.
Total income from operations grew by 11.3% at Rs 1,145 crore on a Y-o-Y basis.
Earnings before interest, tax, depreciation and amortization (EBITDA) margins improved 110 basis points Y-o-Y to 18.2% in Q1FY16, driven by lower raw material costs.
Motilal Oswal Research has put a ‘buy’ rating on the stock, with a target price of Rs 1,099.
FY16 is an inflection year for Amara Raja Batteries —with new capacities driving top-line and benign lead prices driving margins, translating into around 34% earnings per share (EPS) CAGR (FY15-17) after muted FY15. A stable competitive environment, significant free cash flow generation and improving return on equity (RoE)—coupled with potential shift from unorganized to organized players due to the Goods and Service Tax (GST)—would continue to drive re-rating of the stock, the broking house analysts said in a research report.
At 01:56 PM, the stock was up 7.5% at Rs 1,048 on the NSE with a combined 1.06 million shares changing hands on the counter on the NSE and BSE.
Total income from operations grew by 11.3% at Rs 1,145 crore on a Y-o-Y basis.
Earnings before interest, tax, depreciation and amortization (EBITDA) margins improved 110 basis points Y-o-Y to 18.2% in Q1FY16, driven by lower raw material costs.
Motilal Oswal Research has put a ‘buy’ rating on the stock, with a target price of Rs 1,099.
FY16 is an inflection year for Amara Raja Batteries —with new capacities driving top-line and benign lead prices driving margins, translating into around 34% earnings per share (EPS) CAGR (FY15-17) after muted FY15. A stable competitive environment, significant free cash flow generation and improving return on equity (RoE)—coupled with potential shift from unorganized to organized players due to the Goods and Service Tax (GST)—would continue to drive re-rating of the stock, the broking house analysts said in a research report.
At 01:56 PM, the stock was up 7.5% at Rs 1,048 on the NSE with a combined 1.06 million shares changing hands on the counter on the NSE and BSE.
