Margins will improve to 18% after 4-5 years: SV Raghavendra, Amara Raja

In a chat with ET Now, SV Raghavendra, Chief Financial Officer, Amara Raja, shares his business outlook. Excerpts:

ET Now: The analyst community now expects your margins to further expand to 18% in the next two-three years. How are you planning to achieve this?

SV Raghavendra: The margins will remain around 16.5% and will not be immediately raised to 18%, mainly because we are now adding capacities. We are adding capacities to grow volumes, which will add to the cost. Maybe after four-five years when the capacities are fully on stream, we will be able to achieve improvement in the margins. It all depends upon the market conditions prevailing at that point of time.

ET Now: Tell us about your market share though. What is your current market share and what are your plans to expand from these levels?

SV Raghavendra: Yes, with the addition in capacities, we are able to increase our market share as far as the OEM supplies are concerned. They are growing at a healthy double-digit growth and as far as after market is concerned, both in terms of four wheelers and two wheelers, we are having 15-20% growth year on year basis and that will continue.

ET Now: You mentioned about expanded capacity. I believe now you would be the second largest auto battery maker in the country. What is your assessment of the auto sector growth for the next three-four quarters?

SV Raghavendra: The auto sector is one of the fast growing sectors because of the bullishness in the economy. This is going to be one of the sectors, which is going to grow quite rapidly, and Amara Raja is well geared up to meet the market demand. We will have our market share growth year on year.