Battery companies an interesing prospect in the coming days: Ajay Bagga

In a chat with ET Now, Ajay Bagga, Market Expert, shares his views on the battery companies. Edited Excerpts:

ET Now: The consensus call was that Exide supplies to OEMs so it does not have pricing power. And hence, the margin benefit will not come into Exide. It will come into Amara Raja. But both of them look like they are moving up. Exide has been outperforming Amara Raja for the past couple of weeks at least, if not the past couple of years. Do you like the battery maker Amara Raja?

Ajay Bagga: Yes. Overall you will have to go back to auto pack to see. You are seeing that after banks this is the very good sector. Be it two wheelers, four wheelersor the commercial vehicles, the replacement cycle is finally kicking in after about four to five years of just no replacement coming through. I would say suppliers to that kind of booming sector will do well. If you have raw material prices coming down, be it rubber for tyre makers or lead for battery makers, they would be beneficiaries of this. Look at the managements and how they have been rewarding the minority shareholders. That could give a cue on where to invest within this pack.