Amara Raja Batteries Q2 Review - Cost Pressures Dilute Benefit From Strong Revenue Growth: Motilal Oswal
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Motilal Oswal Report
Amara Raja Batteries Ltd.’s Q2 FY22 performance was in line, as raw material cost pressures were diluted by strong revenue growth.
Near term headwinds (rising raw material prices) could affect a recovery in margin.
Amara Raja has taken the first steps towards its next phase of growth in the new energy business by supplying Li-ion battery pack to three-wheelers, but it is yet to finalise its full-fledged entry into lithium cell manufacturing.
We cut our FY22E/FY23E earnings per share estimate by 7%/6% to account for high raw material and other costs.
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