Monday, June 27, 2011

Amara Raja Batteries - Buy

Amara Raja Batteries: The company manufactures batteries for the auto and industrial sectors. Its Amaron range of automotive batteries enjoy a healthy demand. It is the market leader in India in the VRLA (valve-regulated lead-acid) battery segment with a 42% market share.

In the industrial segment, its product mix includes Powerstack, a modular range with varying capacities, and Quanta, a UPS battery with fail-safe, foolproof technology. These find application in sectors like railways, UPS, defence, oil and gas, and power control. This segment boasts of clients such as BSNL, MTNL , Lucent , Alcatel, Siemens , BHEL and Crompton Greaves among others. The company exports batteries to Singapore, Malaysia, Indonesia, Taiwan, Philippines, Greece, Australia, Kuwait, Dubai, China and Japan. Amara Raja continued to post healthy growth in the last quarter.

Its standalone net profit rose by 12% on y-o-y basis to Rs41 crore, while total income rose 16% to Rs502 crore for the quarter ended March 2011.

An auto sector analyst with Angel Broking says: "The company is expected to see huge replacement demand as auto sales pick up (once the interest rate cycle peaks out), which will help it maintain its volume growth."

Our Recommendation :
Amara Raja gives good trading opportunity. Buy on declines @ 175 and sell !@ 250 holding period

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