Buy Amara Raja Energy & Mobility, target price Rs 1395: Hem Securities
Hem Securities suggests buying Amara Raja Energy & Mobility, targeting a price of Rs 1395. The firm is strong in lead-acid batteries and expanding export markets. With steady growth, it positions itself for the future with EV and ESS batteries. St...
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Hem Securities has a buy call on Amara Raja Energy & Mobility with a target price of Rs 1395. The current market price of Amara Raja Energy & Mobility Ltd. is Rs 1208. Amara Raja Energy & Mobility, incorporated in 1985, is a Mid Cap company with a market cap of Rs 22131.43 crore, operating in Auto Ancillaries sector.
Amara Raja Energy & Mobility Ltd. key Products/Revenue Segments include Batteries (Storage), UPS/Uninterruptible Power Supply Systems, Export Incentives, Sale of services and Scrap for the year ending 31-Mar-2024.
Financials
For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 3276.20 crore, down -.50 % from last quarter Total Income of Rs 3292.64 crore and up 9.60 % from last year same quarter Total Income of Rs 2989.13 crore. The company has reported net profit after tax of Rs 235.61 crore in latest quarter.
The company's top management includes Mr.Jayadev Galla, Mr.Harshavardhana Gourineni, Mr.Vikramadithya Gourineni, Mr.N Sri Vishnu Raju, Mr.T R Narayanaswamy, Ms.Bhairavi Tushar Jani, Mr.Annush Ramasamy, Mr.Amar Patnaik. Company has Deloitte Haskins & Sells LLP as its auditors. As on 30-09-2024, the company has a total of 18 crore shares outstanding.
Investment Rationale
Amara Raja's steady growth is underpinned by its lead-acid battery dominance and expanding export markets. Investments in EV and ESS batteries position it for future growth, though profitability in the lithium segment hinges on reaching 8 GWh production with 11-12% EBITDA margins. The recycling plant and tubular battery production will enhance efficiency and margins, supporting long-term value creation. With strong fundamentals and diversification, the company remains well-positioned for sustainable returns. Hem Securities reiterates a ?BUY? rating on the stock & value the stock at 19x FY26E earnings to arrive at the target of Rs 1,395.
Promoter/FII Holdings
Promoters held 32.86 per cent stake in the company as of 30-Sep-2024, while FIIs owned 22.33 per cent, DIIs 15.24 per cent.
Amara Raja Energy & Mobility Ltd. key Products/Revenue Segments include Batteries (Storage), UPS/Uninterruptible Power Supply Systems, Export Incentives, Sale of services and Scrap for the year ending 31-Mar-2024.
Financials
For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 3276.20 crore, down -.50 % from last quarter Total Income of Rs 3292.64 crore and up 9.60 % from last year same quarter Total Income of Rs 2989.13 crore. The company has reported net profit after tax of Rs 235.61 crore in latest quarter.
The company's top management includes Mr.Jayadev Galla, Mr.Harshavardhana Gourineni, Mr.Vikramadithya Gourineni, Mr.N Sri Vishnu Raju, Mr.T R Narayanaswamy, Ms.Bhairavi Tushar Jani, Mr.Annush Ramasamy, Mr.Amar Patnaik. Company has Deloitte Haskins & Sells LLP as its auditors. As on 30-09-2024, the company has a total of 18 crore shares outstanding.
Investment Rationale
Amara Raja's steady growth is underpinned by its lead-acid battery dominance and expanding export markets. Investments in EV and ESS batteries position it for future growth, though profitability in the lithium segment hinges on reaching 8 GWh production with 11-12% EBITDA margins. The recycling plant and tubular battery production will enhance efficiency and margins, supporting long-term value creation. With strong fundamentals and diversification, the company remains well-positioned for sustainable returns. Hem Securities reiterates a ?BUY? rating on the stock & value the stock at 19x FY26E earnings to arrive at the target of Rs 1,395.
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Promoter/FII Holdings
Promoters held 32.86 per cent stake in the company as of 30-Sep-2024, while FIIs owned 22.33 per cent, DIIs 15.24 per cent.
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