Amara Raja Batteries Q3 PAT jumps 17.43%

The leading battery manufacturer, Amara Raja Batteries (ARB) posted a good set of numbers for third quarter of current financial year. The company's total income increased by 13.44 per cent and its PAT increased by 17.43 per cent on yearly basis for Q3FY14.

The automobile battery business mainly grew by strong volume expansion in two wheeler batteries and marginal volume growth in four wheeler batteries. The OEM demand continued to be sluggish and an early sign of slowdown in four wheeler demand is seen during the period under review. Further, the volumes under the industrial batteries segment were flat due to subdue market sentiments. Further, the unfavourable season affected the volumes in home UPS business. Despite of all these odds, the company posted double digit growth only because of good product mix and yearly inflation.

Interestingly, the nine months revenue in current financial year showed an 18 per cent growth and net profit during the same time showed a handsome 26 per cent growth on yearly basis. Furthermore, the nine months net profit has surpassed full year’s net profit of FY2013. The quarterly net profit for Q3FY14 stood at Rs 95 crore against Rs 81 crore in Q3FY13. The total expenses grew just 11.54 per cent, lower compared to revenue growth on yearly basis. This has helped company to book more growth in its net profit.

ARB has commissioned its modern and fully integrated MVRLA battery plant at Chittoor, Andhra Pradesh. The plant is expected to commence in full scale from March 2014 and add to its business growth. We expect ARB to continue to post good performance in coming quarters also and the expected revival in automobile industry will take the company to its new high in future.

Commenting on the Q3 performance, Jayadev Galla, Vice-Chairman and Managing Director of Amara Raja Batteries said, “It's heartening to deliver a consistent good performance despite challenging economy, volatile rupee and sluggish demand in the automotive OEM and UPS sectors. However, an early sign of slowdown in growth rate of four-wheeler automotive replacement demand requires close watch and innovative approach to sustain double digit volume growth. The successful completion of MVRLA capacity expansion and other ongoing capacity expansions in various product lines will provide enough momentum to the growth in line with our strategic plan for the five years period leading to FY19".