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Motilal Oswal Report
Amara Raja Batteries Ltd.’s Q1 FY23 earnings were led by strong revenue growth across segments. High raw material costs continued to impact margin.
The recent moderation in lead prices will aid a margin recovery. Volumes should see good growth across segments in FY23.
Revenue/Ebitda/adjusted profit after tax grew 39%/4%/6% YoY to Rs 26.2 billion/Rs 2.6 billion/Rs 1.3 billion (our estimate Rs 22.6 billion/Rs 2.4 billion/Rs 1.1 billion).
Amara Raja's blended volume growth is estimated at 27-28% YoY. Realisations are estimated to have grown by 11-12%. Overall four wheeler/two-wheeler/industrial volume is estimated to have grown by 11- 13%/38-40%/18-20% YoY.
Gross margin decline of 4.5% YoY and 130 bps QoQ to 26.6% (our estimate: 28.2%). The QoQ decline in gross margin was due to a weaker mix (higher original equipment manufacturer contribution and an increase in traded goods).
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