Amara Raja Energy & Mobility Ltd - Stock Valuation and Financial Performance

BSE: 500008 | NSE: ARE&M | Batteries | Small Cap

Amara Raja Energy Share Price

948.60 -16.65 -1.72%
as on 18-Feb'25 16:59

DeciZen - make an informed investing decision on Amara Raja Energy

Overall Rating
Bole Toh

1. Quality

2. Valuation

Somewhat Undervalued

3. Price Trend

Amara Raja Energy & Mobility stock performance -

P/E Ratio (SA):
16.94
Market Cap:
17,361.8 Cr.
52-wk low:
737.7
52-wk high:
1,774.9

Is Amara Raja Energy & Mobility Ltd an attractive stock to invest in?

1. Is Amara Raja Energy & Mobility Ltd a good quality company?

Past 10 year's financial track record analysis by Moneyworks4me indicates that Amara Raja Energy & Mobility Ltd is a good quality company.

2. Is Amara Raja Energy & Mobility Ltd undervalued or overvalued?

The key valuation ratios of Amara Raja Energy & Mobility Ltd's currently when compared to its past seem to suggest it is in the Somewhat Undervalued zone.

3. Is Amara Raja Energy & Mobility Ltd a good buy now?

The Price Trend analysis by MoneyWorks4Me indicates it is Weak which suggest that the price of Amara Raja Energy & Mobility Ltd is likely to Fall in the short term. However, please check the rating on Quality and Valuation before investing.

10 Year X-Ray of Amara Raja Energy:

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end.

Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Amara Raja Energy & Mobility Ltd has performed well in majority of the past ten years indicating its past ten year financial track record is very good

Value Creation

Value Creation Index Colour Code Guide

Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24TTM
ROCE % 37.9%36.7%29.2%25.4%23.1%24%22.2%16%19.2%19.2%-
Value Creation
Index
1.81.71.20.90.70.80.70.20.40.4-

Growth Parameters

Growth Parameters Colour Code Guide

Sales 4,2114,6185,3176,0596,7936,8397,1508,69610,39011,26012,228
Sales YoY Gr.-9.7%15.2%14%12.1%0.7%4.5%21.6%19.5%8.4%-
Adj EPS 23.628.327.626.727.738.13728.843.748.556
YoY Gr.-20.3%-2.8%-3.3%4%37.5%-3%-22%51.5%11%-
BVPS (₹) 99.5123.9151.8172195.3214246.5266.5312.2369.9412.4
Adj Net
Profit
4024844714554736516314937468881,025
Cash Flow from Ops. 3955555533225411,1778026339561,314-
Debt/CF from Ops. 0.20.10.10.20.10000.10-

CAGR

CAGR Colour Code Guide

9 Years 5 Years 3 Years 1 Years
Sales 11.6%10.6%16.4%8.4%
Adj EPS 8.4%11.9%9.5%11%
BVPS15.7%13.6%14.5%18.5%
Share Price 0.8% 3.9% 16.8% 10.9%

Key Financial Parameters

Performance Ratio Colour Code Guide

Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24TTM
Return on
Equity %
26.325.42016.515.118.616.111.314.113.914.3
Op. Profit
Mgn %
16.717.91614.614.116.115.611.81414.413.9
Net Profit
Mgn %
9.610.58.97.579.58.85.77.27.98.4
Debt to
Equity
0000000000-
Working Cap
Days
87928710611711711711010710653
Cash Conv.
Cycle
4947485965616263575624

Recent Performance Summary

Return on Equity has increased versus last 3 years average to 14.30%

Sales growth is growing at healthy rate in last 3 years 16.35%

Sales growth is good in last 4 quarters at 12.33%

Net Profit has been subdued in last 3 years 9.48%

Latest Financials - Amara Raja Energy & Mobility Ltd.

Standalone Consolidated
TTM EPS (₹) 56 55.3
TTM Sales (₹ Cr.) 12,228 12,694
BVPS (₹.) 412.4 413.3
Reserves (₹ Cr.) 7,530 7,546
P/BV 2.30 2.30
PE 16.94 17.14
From the Market
52 Week Low / High (₹) 737.65 / 1774.90
All Time Low / High (₹) 1.67 / 1774.90
Market Cap (₹ Cr.) 17,362
Equity (₹ Cr.) 18.3
Face Value (₹) 1
Industry PE 25.4

Quarterly Results

 Mar'24 YoY Gr. Rt. %Jun'24 YoY Gr. Rt. %Sep'24 YoY Gr. Rt. %Dec'24 YoY Gr. Rt. %
Sales (₹ Cr.) 2,797 153,131 133,136 11.63,164 9.8
Adj EPS (₹) 12.5 2213.4 14.913.2 -0.812.8 -13.6
Op. Profit Mgn % 14.58 6 bps13.74 42 bps14.05 -53 bps13.14 -195 bps
Net Profit Mgn % 8.15 98 bps7.81 64 bps7.68 -37 bps7.40 -137 bps

Management X-Ray of Amara Raja Energy:

Shareholding Pattern

JavaScript chart by amCharts 3.21.5
JavaScript chart by amCharts 3.21.5Promoters:32.86%Institutions:36.63%Non-Institutions:30.51%

Promoter's Holding & Share Pledging

JavaScript chart by amCharts 3.21.5Sep22Dec22Mar23Jun23Sep23Dec23Mar24Jun24Sep24Dec240%5%10%15%20%25%30%35%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

Valuation of Amara Raja Energy

MRP
spaceLock icon
MOS
spaceLock icon%
DP
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Base EPS
spaceLock icon
DPS
spaceLock icon
MRP: ₹ 0
DP: ₹0
Base EPS ₹:
DPS ₹:
MOS (%):
Expected EPS Growth Rate:
0%
Base 0%
50%
Expected Rate of Return:
0%
Base 0%
50%
Future PE:
0
Base 0
200
YTD 1Y 3Y 5Y 10Y Max
YTD 1Y 3Y 5Y 10Y Max
YTD 1Y 3Y 5Y 10Y Max
YTD 1Y 3Y 5Y 10Y Max

Event Update

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Analyst's Notes

Amara Raja: Result Snapshot - 25 Jun 2021

Results: Good

Amara Raja reported 30% growth in sales and operating profit over same quarter last year. Pent up demand, inventory stocking are few reasons for steep growth in this quarter. We expect similar growth in the interim on low base. 

Our Opinion: We are cautious on Amara Raja and Exide Industries due to i) EV adoption eating into demand for lead acid batteries ii) high capex to set up Li-Ion space would lower return on equity in medium term. Amara Raja has ambitious plan to incur 7000 Cr in capex for Li-Ion technology. We believe the Li-ion technology involves high scale for lower cost of production on the other hand, it has no pricing power as all battery sales will happen directly to OEMs (Low margin business as OEM have better bargaining power). We continue to monitor these stocks but likely to stay away till we have clarity on winners in Li-ion space. 

Amara Raja: Doesn't affect distribution strength - 04 Apr 2019

Amara Raja Batteries and Johnson Controls have ended their technical assistance agreement with effect from April 1, 2019.

Amara Raja was an industrial battery companies before it partnered with Johnson Controls for Automobiles batteries especially Four wheelers batteries. Johnson Controls had good technology which helped Amara Raja manufacture better quality batteries and offer extended warranties to consumers, via mechanics and after sales channels.

Although technology is important in battery space, it is can borrowed under a royalty agreement. Worldwide, barring the pioneers, not all players are spending big money on inventing new technologies. The success of investing in new technology is uncertain and it is not feasible for every company to reach/match expected output. So a company will either merge/borrow if lacks technology but has other advantages like scale (Chinese), distribution (Indian Batteries companies), etc. or they will close down in absence of any competitive advantage. Exide and Amara Raja have edge in distribution. They will hire innovators to help them manufacture and distribute batteries for Cars to OEM & After sales channel.

Future Prospects

Currently, electric automobiles are make inroads. The demand for Li Ion Batteries for these vehicles is likely to go up. Li Ion batteries do not require distribution edge as OEM will installed these batteries in cars. Large scale benefit (Economies of scale) is the only advantage a company would require. Since more durable battery life has an important edge in EV sales and also it forms higher % of car’s cost, it is likely to be manufactured inhouse by OEM or purchased from innovator’s manufacturing base. Earlier, car batteries of IC engines cars formed marginal % of car’s cost and hence outsourced to players like Exide and Amara Raja.

As of now, we do not believe the growth of Li-Ion Batteries will accrue to companies like Amara Raja and Exide Batteries. So we might be staring at slower growth for these companies over next 10 years versus previous 10 years. Also, the return on capital employed is likely to come down over time; however, may remain higher than cost of capital (13%).

If the stock prices correct to an extent that these negatives are factored in, we will recommend buy. Currently both the companies are trading at 20-30% above our desired buy price.

Amara Raja Batteries: Overvaluation was our worry! - 28 Oct 2015

We had generated SELL on Amara Raja at INR 1056/share on August 17th 2015. This was solely based on overvaluation in the stock.

We like the company’s products and marketing strategy. It provides good quality batteries in after-sales auto market and in telecom space. The quality and warranty on battery attracts customer to Amaron brand of batteries. Additionally, as per our channel checks we have heard that it also connects through local mechanics to push the products. This is high margin market so it can afford to pass on margins to get high volumes in after-sales market.

Talking about our valuation, we had built in expectation of 22% y-o-y growth rate in profit after tax and ~16-17% y-o-y in the revenues. The company reported revenue growth of ~9% y-o-y and profit growth of 22%.

Due to moderate growth in industrial and UPS volumes, alongside increasing share of reasonably priced OEM sales have resulted in lower sales growth than our estimates. Please note, OEM sales have low realization and hence lower margins, but generate consistent volumes as OEMs do not change their vendors frequently.

On profitability side, the company has been able to maintain its margins thanks to cost cutting and optimum product mix. Low raw material prices were mostly offset by currency depreciation. Our expectation do not change after this result.

We generated SELL signal at the price of INR 1056 based solely based on overvaluation. At that price market was expecting earning per share to grow by 40-45% over 2 years. The market was factoring net margin expansion to 11% in FY 16 and 12% in FY 2017. We do believe that margin may expand slightly from these levels to 11% but only over next two years as operating leverage kicks in. But market's expectations are too optimistic to be true. We want to highlight that since auto and two wheeler sales were low in FY 2011-2014, after-sales volumes are likely grow at a lower rate. Increasing OEM sales in total sales can drive margins lower. We are hopeful that the company will maintain EBITDA margins by increasing prices in after-sales market but there are limitations for margins to expand beyond 11%.

We hope you sold your stock on our SELL price of INR 1056. Currently, the stock is down 13% from our signal. Despite good results, stock corrected by 6% today due to overvaluation.

Happy Investing!

Key Ratios of Amara Raja Energy

Adj EPS (Rs.)

Sales (Cr.)

ROE (%)

ROCE (%)

Company Name CMP(₹)
Change ₹(%)
Market Cap
Net Sales (₹ Cr.)
Latest EPS (₹)
Net Profit Margin %
Latest P/E
Latest P/BV
Amara Raja Energy 948.6 -16.7 (-1.7%) Small Cap 11,260 56 7.9 16.9 2.3
HBL Engineering 457.5 -20.4 (-4.3%) Small Cap 2,209 10.4 12.6 44.2 9
Eveready Inds. India 291.6 -8.1 (-2.7%) Small Cap 1,314 11 5.2 26.5 4.7
Indo-National 421.9 -23.2 (-5.2%) Small Cap 466 3.8 1.5 111 1.4
Panasonic Energy Ind 354.3 1.4 (0.4%) Small Cap 292 15.6 3.9 22.8 2.5
High Energy Batterie 460.3 -9.1 (-1.9%) Small Cap 78.1 11.2 22 41.1 4.6
Waaree Technologies 350.7 -7.2 (-2%) Small Cap 28.5 -7 -26.7 - 101
Electra Accumulators - 0 (0%) Small Cap 0 - - - -
Goldstar Power - 0 (0%) Small Cap 0 - - - -

Profit And Loss

(All Figures are in Crores.)
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24
Sales4,2114,6185,3176,0596,7936,8397,1508,69610,39011,260
Operating Expenses 3,5103,7954,4685,1765,8425,7416,0357,6758,9569,639
Manufacturing Costs195226246266305327328400529465
Material Costs2,7762,9113,4884,1164,6444,4474,7456,1216,9987,534
Employee Cost 195243278309345385426499651699
Other Costs 343416456484548582537655778940
Operating Profit 7028238498839511,0981,1151,0211,4341,621
Operating Profit Margin (%) 16.7%17.8%16.0%14.6%14.0%16.1%15.6%11.7%13.8%14.4%
Other Income 424650664855888091102
Interest 066571211153033
Depreciation 134141191230261301319396450479
Exceptional Items 00000000-480
Profit Before Tax 6107237027147308418736909971,211
Tax 199231224243247180227179266305
Profit After Tax 411492478471483661647511731906
PAT Margin (%) 9.8%10.6%9.0%7.8%7.1%9.7%9.0%5.9%7.0%8.0%
Adjusted EPS (₹)24.128.828.027.628.338.737.929.942.849.5
Dividend Payout Ratio (%)15%15%15%15%25%28%29%15%14%20%

Balance Sheet

(All Figures are in Crores.)
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24

Equity and Liabilities

Shareholders Fund 1,7002,1162,5932,9373,3353,6564,2104,5515,3336,769
Share Capital 17171717171717171718
Reserves 1,6822,0992,5762,9203,3183,6394,1934,5345,3166,750
Minority Interest0000000000
Debt74726958473423178026
Long Term Debt74726958473423178026
Short Term Debt0000000000
Trade Payables261349418592510615746806759840
Others Liabilities 5374135045806036968171,0011,7661,200
Total Liabilities 2,5712,9513,5854,1694,4965,0015,7976,3767,9378,834

Fixed Assets

Gross Block1,4411,4861,8162,2532,6162,9273,8634,2505,7245,903
Accumulated Depreciation4971343235508041,0981,4081,7572,0352,353
Net Fixed Assets9441,3521,4921,7031,8131,8292,4552,4923,6883,550
CWIP 86123240226315827399830234322
Investments 16201473520156281784861,479
Inventories4186028171,0501,0611,1431,4381,8041,7331,810
Trade Receivables5545925707827696367877938901,017
Cash Equivalents 222150171111728517654100104
Others Assets330112147260446325261326805552
Total Assets 2,5712,9513,5854,1694,4965,0015,7976,3767,9378,834

Cash Flow

(All Figures are in Crores.)
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24
Cash Flow From Operating Activity 3955555533225411,1778026339561,314
PBT 6107237027147308418736909971,211
Adjustment 122123167197237283258383502459
Changes in Working Capital -145-73-114-345-184289-130-241-287-27
Tax Paid -192-218-202-244-242-236-200-199-256-329
Cash Flow From Investing Activity -289-394-535-244-463-850-635-482-789-1,072
Capex -406-490-430-385-528-700-496-760-465-440
Net Investments 10286-11013562-123-115214-54-130
Others 1510664-27-2464-270-502
Cash Flow From Financing Activity -75-164-2-138-92-364-122-213-112-242
Net Proceeds from Shares 0000000000
Net Proceeds from Borrowing -1-2-2-9-5-12-12-11-11-58
Interest Paid 000-1-1-5-4-7-16-19
Dividend Paid 0-1610-107-71-331-85-171-58-137
Others -7300-22-15-16-20-25-27-29
Net Cash Flow 31-316-61-13-3746-62550
PARTICULARSMar'15Mar'16Mar'17Mar'18Mar'19Mar'20Mar'21Mar'22Mar'23Mar'24
Ratios
ROE (%)26.8325.7720.3217.0415.4218.9116.4511.6714.7914.97
ROCE (%)37.8536.7229.1625.3923.0624.0422.2415.9919.219.23
Asset Turnover Ratio2.041.881.831.611.571.441.321.481.511.39
PAT to CFO Conversion(x)0.961.131.160.681.121.781.241.241.311.45
Working Capital Days
Receivable Days40403540423736322830
Inventory Days30364355575966666056
Payable Days26384045434652464139

Amara Raja Energy & Mobility Ltd Stock News

Amara Raja Energy & Mobility Ltd FAQs

Company share prices are keep on changing according to the market conditions. The closing price of Amara Raja Energy on 18-Feb-2025 16:59 is ₹948.6.
Market capitalization or market cap is determined by multiplying the current market price of a company's shares with the total number of shares outstanding. As of 18-Feb-2025 16:59 the market cap of Amara Raja Energy stood at ₹17,361.8.
The latest P/E ratio of Amara Raja Energy as of 18-Feb-2025 16:59 is 16.94.
The latest P/B ratio of Amara Raja Energy as of 18-Feb-2025 16:59 is 2.30.
The 52-week high of Amara Raja Energy is ₹1,774.9 and the 52-week low is ₹737.6.
The TTM revenue is Trailing Twelve Months sales. The TTM revenue/sales of Amara Raja Energy is ₹12,228 ( Cr.) .

About Amara Raja Energy & Mobility Ltd

Amara Raja Batteries (ARBL), the flagship company of the Amara Raja Group, is a leading manufacturer of automotive batteries under the brands - Amaron and PowerZone, which are distributed through a large pan-India sales & service retail network. The company's Industrial and Automotive batteries are exported to several countries across the globe. It is the first company to manufacture Valve Regulated Lead-Acid (VRLA) batteries in India. They are engineered to provide the performance reliability and consistency over the life of the product and they offer a long battery life with minimal maintenance. In India, the company is the preferred supplier to major telecom service providers, Telecom equipment manufacturers, UPS sector (OEM & Replacement), Indian Railways and to Power, Oil & Gas among other industry segments. 

The company’s manufacturing facilities are equipped with state-of-the-art machines and technology. Each plant is designed to improve shop floor efficiencies by adopting globally recognized concepts such as Lean Six Sigma, 5S and Quality Circle projects. The manufacturing facilities have imbibed low-cost automation to reduce operator fatigue which helps in improving product quality and person productivity. Its World-Class integrated manufacturing facilities are constantly evolving and are ever ready to adopt the latest technological advancements. Its in-house R & D centre, which is recognized by Government of India, ensures constant innovation and best in class products.

Business area of the company

The company is the technology leader and is one of the largest manufacturers of lead-acid batteries for both industrial and automotive applications in the Indian storage battery industry. Amara Raja Automotive Batteries offers a wide range of battery solutions in Passenger Vehicles, Three Wheelers, Two Wheelers, Commercial Vehicles, Farm Vehicles, and Home UPS/Inverters. Besides, Amara Raja Industrial Batteries offers a broad range of battery solutions in segments like UPS, Telecom, Railways, Defence and Motive.

Products

  • PowerStack
  • Amaron Sleek 
  • Amaron Volt 
  • Genpro 
  • Amaron Quanta
  • Amaron Quanta-HWS 
  • Amaron Quanta -HUPS
  • Amaron Brute
  • Amaron Solar
  • Amaron Quanta S-XEL

Awards and Accolades

  • 2013: Received the Gold Award for support in the SME category in the event organized by Indus Towers.
  • 2014: Presented with the Silver Award for support in the category 'Infra - Equipment’ in event organized by Indus Towers.
  • 2016: Bagged recognition for being 'Telecom Infra Leader' in the Power Solutions Category for the year 2016 at the 24th Annual CyberMedia ICT Awards.
  • 2016: Received the Gold Award for support in the category 'Infra-Equipment' in event organized by Indus Towers.
  • 2017: Received an award from Tata Motors and this award is in recognition for its excellence in the field of QCDM parameters (Excellence in Quality, Delivery, and Relationship Building).
  • 2017: Bagged 'India's Most Promising Company of The Year 2016-2017' award during the 12th CNBC TV18 India Business Leader Awards that was held in Delhi.
  • 2017: Received awards for 'Consistent High-Quality Performance' and 'Design & Development' from Maruti Suzuki India.
  • 2017: Received Overall Performance Award – Bosch.
  • 2017: Amara Raja Group Small Battery Division has won the First Runner Award in Eleventh CII Six Sigma National Conference and Competition under the 'Manufacturing Industry (Discrete and Assembly Line)' category.
  • 2018: Received first prize in AP Green awards 2017 under Industries (Private) category from A.P. Greening and Beautification Corporation, Government of Andhra Pradesh.
  • 2018: Presented with Gold Award for support in the category 'Infra Equipment- Supply in the event organized by Indus Towers.
  • 2018: Received an award for 'High-Quality Performance' from Bajaj Auto.
  • 2018: Received an award for 'Best Vendor Rating and System Audit' from Maruti Suzuki India.
  • 2018: Secured second place in 'Construction Safety' in a competition held during the quarterly award function in Maharashtra Circle.

History and Milestones

  • 1995: Incorporation of the company.
  • 1989: Inks technology agreement with GNB Batteries Inc.
  • 1990: Introduced VRLA technology in India.
  • 1991: Goes public.
  • 1991: Launched VRLA batteries for telecom application.
  • 1992: Commenced production of VRLA batteries.
  • 1993: Launched batteries for Indian Railways.
  • 1995: First export shipment of Industrial Batteries by company.
  • 1996: Launched VRLA batteries in Indian Railways for Rolling Stack Application.
  • 1997: Received ISO certification.
  • 1997: Diversified into automotive batteries and signed JV with Johnson Controls Inc.
  • 1998: Received QS-9000 certification.
  • 1998: Supply of first batch of automotive batteries to Ford India.
  • 2000: Launched Brand AMARON Automotive batteries.
  • 2001: Received ISO 14001 certification.
  • 2001: Corporate logo launched.
  • 2001: Inauguration of Automotive battery plant.
  • 2002: Industrial Batteries division (IBD) of company launched Quanta Branded UPS Batteries.
  • 2002: Automotive Batteries division (ABD) of company launched Amaron Hi Way and Amaron Harvest batteries.
  • 2004: Automotive Batteries division (ABD) of company launched Amaron PRO, Amaron GO, Amaron FRESH and Amaron SHIELD batteries.
  • 2007: Launched Brand Powerzone Automotive Batteries.
  • 2007: Inaugurated 2 Wheeler battery plant.
  • 2008: Launched Amaron Probike Rider, the first AGM batteries for two wheelers.
  • 2010: Unveiled new Amaron logo.
  • 2010: Launched Amaron Sleek and Amaron Volt brands for Industrial applications.
  • 2012: QRS series introduced for Telecom to aid efforts in reduction of diesel consumption.
  • 2012: Launched Amaron Current HUPS Tubular Batteries.
  • 2014: Inaugurated world’s largest integrated Medium Valve Regulated Lead Acid (MVRLA) battery plant at ARGC, Nunegundlapalli, Chittoor, Andhra Pradesh, India.
  • 2016: Inaugurated Tubular battery plant.
  • 2017: Launch of Amaron Brute brand for Motive Power by Industrial Batteries Division.
  • 2017: Inaugurated India’s largest and most advanced two wheeler battery plant at Amara Raja Growth Corridor (ARGC).
  • 2018: Incorporation of wholly owned subsidiary in Sharjah Airport International Free Zone (SAIF Zone).
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