HDFC Securities: Amara Raja Batteries - Towards A ‘Charged’ Future
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HDFC Securities Report
Currently, Amara Raja Batteries Ltd. has a approximately 20% market share in the 5 billion U.S. dollar lead-acid battery (LAB) segment.
We expect it to gain further share as revenues are forecasted to grow in double digits over the next three to five years (versus mid-single-digit for the industry).
While Amara Raja would benefit from the shift towards the organised segment in the near term, we believe that the advent of new technologies such as lithium-ion will change industry dynamics; though the pace of adoption is expected to be very gradual.
Amara Raja’s future technology partnerships (after the exit of Johnson Controls) and its ability to foray into alternative battery chemistries will determine its growth opportunities in the long term.
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