Amara Raja skids

Amara Raja Batteries posted a set of disappointing numbers for Q3FY17. The company’s earnings have been impacted by demonetization and its Original Equipment (OE) in both 4-wheeler as well as 2-wheeler were affected. Growth actually came in from the 4W replacement segment. The increasing price of lead also affected raw material costs, impacting margins and going ahead, price hike will remain a challenge.

The company for Q3FY17, posted a 10% (YoY) rise in net sales at Rs.1502 crore. Costs rose 14% and raw material costs were up 24%. EBITDA was down 11% at Rs.204 crore while margins came down from 16.8% to 13.6%.

9MFy17 net profit was at Rs.379 crore, which is 77% of FY16 net profit of Rs.489 crore. Equity stands at Rs.17.08 crore and annualized EPS is at Rs.30 (FV of Re.1).

Stock price tumbled down 5% to Rs.857.25; it has recovered from there though remains in the red and amongst the top five losers on the BSE.