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Motila Oswal Report
Amara Raja Batteries Ltd.’s Q1 FY21 performance was supported by a better mix (lower original equipment manufacturer sales) and lower lead prices.
While aftermarket recovery was good, recently there has been inflation in lead prices (14.6% increase in spot Indian rupee prices versus Q1 FY21 average)
Revenue/Ebitda/profit after tax declined approximately 37%/45%/56% YoY to approximately Rs 11.5 billion/Rs 1.52 billion/Rs 0.62 billion.
Gross margin expanded by 105 basis points YoY (down 280 basis points QoQ) to approximately 33.5% (versus estimate approximately 37%) due to consumption of high-cost inventory.
Adjusted for impact in change in inventory, gross margins were stable on QoQ basis. Benefit of mix was off-set by high-cost inventory. Pricing in aftermarket was stable.
Ebitda margins declined 220 basis point YoY (down 220 basis point QoQ) to approximately 13.2% (versus estimate approximately 14.3%) due to operating deleverage.
Ebitda declined 45% YoY to approximately Rs 1.52 billion (in-line). Profit after tax declined approximately 56% YoY to approximately Rs 627 million (in-line).
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