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  • Corporate Results - Detailed News
Amara Raja
23-Jul-19   10:18 Hrs IST
Amara Raja Batteries has posted 25% growth in net profit to Rs. 140.91 crore on the back of 2% jump in sales revenue to Rs 1,814.95 crore for the first quarter ended June 2019, thanks to growth in both four wheeler & two wheeler category in the aftermarket segment and a moderate growth in industrial business volumes, and softer lead prices that helped in maintaining the operating performance. Operating profit margin (OPM) of the company improved 300 bps to 15.38%, thus, Operating Profit grew 27% to Rs 279.18 crore.

Automotive Battery Business

Automotive business showed healthy growth in both four wheeler & two wheeler category in the aftermarket segment. OEM sales witnessed a fall in line with degrowth in the new vehicle sales. Business in international markets continued its upward trend supported especially in the high potential countries of South East Asia & Middle East.

Industrial battery business

The industrial business witnessed a moderate growth in volumes. The telecom volumes remained subdued due to consolidation of the tower companies in the Telecom Market and the competitive pressures.

Commenting on the Q1 performance, Mr. Jayadev Galla, Vice Chairman & Managing Director, Amara Raja Batteries Limited said The gap created due to lesser sales in OEM segment of the automotive business got compensated by growth in exports and aftermarket business supported by softer lead prices that helped in maintaining the operating performance. We will continue to pursue opportunities for strategic partnerships that will be complimentary to our vision and growth objectives.

Commenting on the Q1 performance, Mr. S. Vijayanand, CEO, Amara Raja Batteries Limited said The Industrial batteries demand is stable and the growth opportunities in solar and motive power batteries are encouraging. The Capacity expansion plans across product segments are in line with the growth forecasts. Expansion of our two wheeler capacity will help increasing our presence in the OEM segment.

Performance for quarter ended June 2019

Amara Raja Batteries net sales revenue rose 2% to Rs 1,814.95 crore for the first quarter ended June 2019, thanks to growth in both four wheeler & two wheeler category in the aftermarket segment and a moderate growth in industrial business volumes. Operating expenses declined by 1% to Rs 1,535.77 crore as softer lead prices that helped in maintaining the operating performance.

Operating profit margin (OPM) of the company improved 300 bps to 15.38%. The gain in OPM was largely due to 620 bps fall in costs of raw materials to 60.8% as percentage to sales and net of stock adjustments. Thus, Operating Profit grew 27% to Rs 279.18 crore.

After accounting Other income of Rs 10.23 crore (down 25%), interest cost of Rs 2.89 crore (up 94%), and depreciation cost of Rs 73.31 crore (up 16%), the Profit Before Tax (PBT), as a result, rose 26% at Rs 213.21 crore.

The tax provision grew 28% to Rs 72.30 crore. The effective tax rate was up by 60 bps to 33.9%. Thus, the net profit inclined by 25% to Rs 140.91 crore.

Annual Financial Performance

For the financial year ended March 2019 (FY 2019), net sales revenue inclined 12% to Rs 6,793.11 crore. OPM reduced by 60 bps to 14.01%. The drop in OPM was largely due to 210 bps jump in costs of raw materials to 66.5% as percentage to sales and net of stock adjustments. Eventually, Operating Profit grew 8% to Rs 951.75 crore.

Other income was down by 30% to Rs 46.77 crore. The interest cost jumped by 37% to Rs 6.95 crore while the depreciation gained by 13% to Rs 261.20 crore. Thus the PBT grew by 2% to Rs 730.37 crore.

The tax provision rose by 2% to Rs 246.88 crore in absolute terms but the tax rate at 33.8% for the period was down by 20 bps from tax rate of 34% in corresponding previous period. Thus the net profit inclined 3% to Rs 483.49 crore.

The scrip is currently trading at Rs 621.10 (22 July 2019) on the BSE.

Amara Raja Batteries: Results

Particulars1906 (3)1806 (3)Var %1903 (12)1803 (12)Var %
Sales1814.951778.6726793.116059.1512
OPM (%)15.3812.3814.0114.58
Operating Profit279.18220.2627951.75883.238
Other income10.2313.71-2546.7766.37-30
PBIDT289.41233.9724998.52949.605
Interest2.891.49946.955.0637
PBDT286.52232.4823991.57944.545
Depreciation73.3162.9516261.20230.3413
PBT before EO213.21169.5326730.37714.202
EO0.000.000.000.00
PBT after EO213.21169.5326730.37714.202
Taxation 72.3056.5028246.88242.882
Net Profit140.91113.0325483.49471.323
EPS (Rs)*33.0026.4728.3127.59
* Annualized On Current Equity Of Rs 17.08 Crore. Face Value: Rs 1^ Tax Includes Provision For Current Tax, Deferred Tax, Fringe Benefit Tax And Net Of Reversals/Credit
EPS Is Calculated After Excluding EO And Relevant Tax
Figures in Rs crore
Source: Capitaline Corporate Databases

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