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Amara Raja batteries Q4 results review, Dolat Capital

Amara Raja displayed steady set of performance in Q4FY23, Net revenue de-grew 7.9 % QoQ to Rs.24.29bn (+11.4% YoY) while EBITDA stood at Rs.3.37bn with margin at 13.9% (-117 bps QoQ) impacted by reversal higher power and RM cost.

In FY24, management guided low double digit volume growth led by strong demand from OEM/aftermarket, pick up in telecom segment revenue owing to 5G rollouts, steady automotive production and offtake in export.

We maintain our positive view on Amara Raja due to 1) increase in production capacity which will help gain market share in the OEM segment (new business orders in 2W from TVS and Hero); 2) sharp recovery in replacement and OEMs demand 3) diversification through foray into cell manufacturing and 4) increase in capacity utilisation help in margin recovery.

Valuation- We value stock at Rs.666 (14x FY25E EPS) and recommend Accumulate. Bloomberg

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