AMARA RAJA BATTERIES LTD - SEPTEMBER QUARTER RESULT FY 17 

Amara Raja Batteries Ltd one of the leading manufacturers of automotive batteries reported double digit growth numbers for its second quarter FY17. Revenue rose 18% YOY from Rs.12891 Mn to Rs. 15204 Mn in the current September quarter. Net Profit grew by 10% yearly at Rs. 1363 Mn against Rs. 1234 Mn in the same period previous year. Sequential growth was slower at 4% for both Revenue & PAT in the current Q2 FY17. Other Income on the other hand was on a stronger footing quarterly with a 34% rise and was reported at Rs. 120 Mn compared to Rs. 112 Mn in current Q2 FY17 with yearly growth at 7%. EBDITA stood at Rs. 2417 Mn compared to Rs. 2112 Mn in the same period previous year growing by 2% QOQ & 14% on yearly basis. Expenditure jumped 19% YOY from Rs. 11235 Mn to Rs. 13364 Mn in the current September quarter. As a result, EBDITA margin declined 48 basis points YOY as operating expenses outpaced Revenue growth. Interest or Finance costs jumped 16% YOY at Rs. 14.90 Mn in the current September quarter. Tax expenditure constituting 4% of total revenue jumped 12% YOY in Q2 FY17. Taxation expense was reported at Rs. 582 Mn compared to Rs. 522 Mn in the same period previous year. Net Profit Margin was 8.97% against 9.57% same period previous year.  We recommend BUY for the stock for medium & long term investment with PE multiple of 27.36x FY17E & 24.39 x FY18E. P/BV is seen at 5.78 x FY17E & 4.67 x FY18E. Disclaimer                                                                                                     The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. 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