Buy M&M Financial Services, target Rs 535: Hadrien Mendonca
Geojit's research report on Amara Raja Batteries
Amara Raja Batteries Ltd (ARBL) is India’s second largest Lead-acid battery manufacturer. Its segment includes automotive and industrial lead acid batteries, with market leadership in Telecom segment.Q3FY18 revenue grew by 16.9%YoY which was largely driven by automotive segment but industrial segment remained subdued. EBITDA margin improved by 20bpsYoY due to price hikes taken for increase in RM cost and effective cost strategies.
We lower our FY19 PAT estimate by 3% respectively to factor higher tax and expect earnings growth at 13% CAGR over FY17-20E. We believe normalization of business in industrial segment and maintain our valuation at 22xFY20E EPS with a revised target price of Rs892 with Accumulate rating.
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