November 7, 2024
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Stock Market

Stock with market share of 50% in Lead and Telecom Battery to add to your watchlist

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Stock Market

Stock with market share of 50% in Lead and Telecom Battery to add to your watchlist

The company recently announced its Q2FY25 results and they have come up with expansion plans. Amara Raja is looking to transform and enter into the EV segment. Here are some of the capex plans mentioned through concall and Investor presentations.

Share Price Movement

The share price of Amara Raja Energy & Mobility Ltd opened at Rs. 1338.95 and touched a day’s high of Rs.1338.95 per share on Thursday’s intraday trade, and fell 1.13 percent from its previous close of Rs.1331.60 per share. However, the shares have adjusted since then and are now trading at Rs.1316.55 each.

Market Leader and their plans

Amara Raja in their recent concall said the company expects to maintain its market share percentage in the telecom sector. The company has around 50 percent when combined with lead and telecom.

The company is closer to a 14 percent mark, which is driven by exports and internal process initiatives. The company plans to achieve a 14 percent to 16 percent margin on a standalone basis if the lead base is around Rs. 1.5 lakh to Rs. 1.8 lakh.

Recently, the company has come up with expansion plans into various EV segments and targeting 50-50 revenue split in traditional and new energy businesses. Amara Raja planned a capex of Rs. 9,500 crore and signed a MoU with the Government of Telangana.

They plan to set up E-positive energy labs in Hyderabad. The land allotment is completed across 262 acres in Telangana for the Customer Qualification plant and 16 GWH Cell Capacity over the next 10 years. There is also a project on lead acid batteries in Tamil Nadu for a Battery recycling plant and in Andhra Pradesh for a tubular battery plant.

Financials

According to its recent filing, In Q2FY25, Amara Raja Energy & Mobility Ltd reported a 9.86 percent increase in revenue to Rs.3,251 crore in Q2FY25, compared to Rs.2,959 crore in Q2FY24. Furthermore, quarterly, the company saw a decrease of 0.36 percent in revenue from Rs.3,263 crore in Q1FY25.

In the same period, the company reported an increase in net profit of 4.42 percent to Rs.236 crore in Q2FY25, up from Rs.226 crore in Q2FY24 and down 5.22 percent from a Rs.249 crore in Q1FY25.

In terms of return ratios, return on capital employed (ROCE) is currently at 18.81 percent, while return on equity (ROE) is at 14.59 percent. The company has a current ratio of 1.80 and a debt-to-equity ratio of 0.03. In FY24, the company earned its revenue 46 percent from India and 54 percent from the US.