Amara Raja dips on ending agreement with Johnson Controls

Amara Raja was trading down on Wednesday after the company announced that it has terminated an agreement with Galla Family and Johnson Controls (JC).

JC had announced the sale of its power solution business to Brookfield for US$13.2 billion. Consequently, JC and the Galla family reached an agreement by which Galla Family would acquire 2 per cent equity shares of the company from JC and terminate the shareholders’ agreement from April 1, 2019.

The fall in share price is also on account of uncertainty over the 26 per cent stake held by Johnson Controls (JC) in Amara Raja Batteries. JC is expected to continue to provide technological assistance to Amara Raja for an additional mutually agreed period.

Amara Raja’s revenues stood at Rs. 1,694.66 crore in December 2018, up by 9.09 per cent from Rs. 1,553.46 crore in December 2017. The company reported a net profit of Rs. 130.89 crore in December 2018 as against Rs. 134.45 crore in December 2017, registering a de-growth of 2.65 per cent.

On Wednesday, Amara Raja was trading at Rs. 673.95 per share, down by 6.64 per cent on the BSE.