Amara Raja Q2 Results Review - Earnings Beat Led By Lower Raw Material Costs: Motilal Oswal

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.Amara Raja Batteries Ltd. Q2 FY23 earnings were led by softening of raw material costs coupled with volume growth across segments. The recent moderation in lead prices will aid margin recovery. Volumes should see an upward trajectory in both automotive and industrial segments.Revenue/Ebitda/adjusted profit after tax grew 19%/34%/40% YoY to Rs 27 billion/Rs 3.6 billion/Rs 2 billion in Q2 FY23 (versus our estimate Rs 25.4 billion/Rs 2.65 billion/Rs 1.3 billion). H1 FY23 revenues/ Ebitda/ adjusted profit after tax grew 28%/20%/24.5% YoY. Amara Raja's gross margins improved 60 bps YoY (390 bps QoQ) at 30.5% (versus our estimate of 27.5%), led by a 9% YoY decline (down 6.5% QoQ) in spot lead prices. Price hikes (2-2.5% QoQ) and soft lead prices boosted gross margins.  Higher gross margins led to a 150 bps YoY improvement in Ebitda margin (up 340 bps QoQ) to 13.3% (versus estimate 10.5%). .Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Amara Raja Q2 Results Review - Earnings Beat Led By Lower Raw Material Costs: Motilal Oswal

The recent moderation in lead prices will aid margin recovery.

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