After the company reported a 39 percent year-over-year increase in consolidated profit for the quarter ended September 2022, shares of Amara Raja Batteries, a market leader in the production of lead-acid batteries for both industrial and automotive applications, opened more than 9 percent higher on November 4.
Strong operating results helped the company’s net profit for the second quarter reach Rs 201.22 crore. At Rs 2,700.5 crore, revenue for the quarter climbed 19.3 percent from the prior year.
The stock went up 10.13 percent to Rs 572.10 at 9:55 am on the National Stock Exchange. It had the highest trading volume (7,312,776) of any stock on the NSE.
Additionally, on Thursday, its Board of Directors approved an interim dividend of Rs 2.90 per equity share with a Re 1 face value.
Volumes increased overall by 10% year over year, with similar growth reported in the auto and industrial sectors. “Recent moderation in lead prices will aid margin recovery. Volumes should see an upward trajectory in both segments,” noted domestic brokerage firm Motilal Oswal.
The company’s EBITDA margin in Q2FY23 was 13.28 percent, a considerable increase from 11.89 percent in the same quarter last year. According to Motilal Oswal, this was primarily caused by a 9 percent YoY fall (and a 6.5 percent QoQ decline) in spot lead prices.
In preparation for the EV revolution, the corporation also established a fully owned subsidiary for the production of lithium ion cells and packs. It intends to begin investing in the new energy project in H2FY23. The stock is rated “neutral” by Motilal Oswal, with a target price of Rs 590 a share.
