Hold Amara Raja Batteries, target Rs 875: ICICI Direct

ICICI Direct has a hold call on Amara Raja Batteries Ltd. with a target price of Rs 875. The current market price of Amara Raja Batteries Ltd. is Rs 794.45 Time period given by the brokerage is a year when Amara Raja Batteries Ltd. price can reach defined target.
Amara Raja Batteries Ltd., incorporated in 1985, is a mid-cap company with a market cap of Rs 13512.12 crore.

Investment rationale by ICICI Direct
ARBL has undertaken a pilot project of lithium-ion battery for E-rickshaw & buses. However, the uncertainty in the automotive battery space persists, considering newer players (including OEMs setting up the battery plant) could impact ARBL’s performance, going forward. Hence, we maintain our HOLD recommendation on the stock with a target price of Rs 875, valuing at 21x FY20E EPS of Rs41/share.