Trade Nivesh | Amara Raja Batteries share price gains 3% after Kotak raises target
The brokerage expects the revenue growth of the lead-acid batteries manufacturer to remain robust through FY19-22.
Amara Raja Batteries share price rallied 3 percent in the morning trade on December 17 after Kotak Institutional Equities raised the target price to Rs 800 from Rs 720, implying a 10.65 percent upside from current levels, while maintaining add call on the stock.
The brokerage expects the revenue growth of the lead-acid batteries manufacturer to remain robust over FY19-22.
"The revenue CAGR in 2-wheeler and 4-wheeler replacement segment is seen at 10-16 percent and exports segment revenue CAGR is seen at 15 percent over FY19-22," the research house said.
The company's earnings before interest, tax, depreciation and amortisation (EBITDA) may be around 16 percent, led by a higher mix of replacement segment, it added.
Amara Raja Batteries, an industrial and automotive battery major, reported a 3 percent degrowth YoY in Q2FY20 revenue at Rs 1,695.31 crore amid slowdown in overall auto sector, but its profit after tax was the highest ever in a quarter, rising 82 percent compared to same period last year due to lower tax expenses.
"While we are encouraged by the continued growth of our brands in replacement markets in both domestic and international markets, we are cautiously evaluating the trends in OE segment and calibrating our investment plans appropriately," Jayadev Galla, Vice Chairman & Managing Director, said after Q2 results.
The stock has rallied 14 percent in the last three months. It was quoting at Rs 743.50, up Rs 20.55, or 2.84 percent, on the BSE at 1052 hours.
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The brokerage expects the revenue growth of the lead-acid batteries manufacturer to remain robust through FY19-22.
Amara Raja Batteries share price rallied 3 percent in the morning trade on December 17 after Kotak Institutional Equities raised the target price to Rs 800 from Rs 720, implying a 10.65 percent upside from current levels, while maintaining add call on the stock.
The brokerage expects the revenue growth of the lead-acid batteries manufacturer to remain robust over FY19-22.
"The revenue CAGR in 2-wheeler and 4-wheeler replacement segment is seen at 10-16 percent and exports segment revenue CAGR is seen at 15 percent over FY19-22," the research house said.
The company's earnings before interest, tax, depreciation and amortisation (EBITDA) may be around 16 percent, led by a higher mix of replacement segment, it added.
Amara Raja Batteries, an industrial and automotive battery major, reported a 3 percent degrowth YoY in Q2FY20 revenue at Rs 1,695.31 crore amid slowdown in overall auto sector, but its profit after tax was the highest ever in a quarter, rising 82 percent compared to same period last year due to lower tax expenses.
"While we are encouraged by the continued growth of our brands in replacement markets in both domestic and international markets, we are cautiously evaluating the trends in OE segment and calibrating our investment plans appropriately," Jayadev Galla, Vice Chairman & Managing Director, said after Q2 results.
The stock has rallied 14 percent in the last three months. It was quoting at Rs 743.50, up Rs 20.55, or 2.84 percent, on the BSE at 1052 hours.
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