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Neutral on Amara Raja Batteries, target price Rs 870: Motilal Oswal

Motilal Oswal Securities has neutral call on Amara Raja Batteries with a target price of Rs 870. The current market price of Amara Raja Batteries is Rs 783.75.

Amara Raja Batteries Ltd, incorporated in the year 1985, is a Mid Cap company with a market cap of Rs 13375.47 Crore, operating in Auto Ancillaries sector.

Amara Raja Batteries Ltd’s key Products/Revenue Segments include Batteries (Storage), UPS/Uninterruptible Power Supply Systems, Sale of services, Export Incentives and Scrap for the year ending 31-Mar-2020.

Investment Rationale

Motilal Oswal said, the stock trades at a valuations of 19.2x/16.4x FY22E/FY23E EPS. Motilal maintains its neutral rating with a target price of Rs 870/share (18x Mar’23E EPS, in line with its 10-year LPA) as expectations of good earnings growth balances out the increasing threat posed by lithium technology to its auto and industrial business.

Financials

For the quarter ended 31-03-2021, the company has reported a Consolidated Total Income of Rs 2134.70 Crore, up 6.97 per cent from last quarter Total Income of Rs 1995.63 Crore and up 33.80 per cent from last year same quarter Total Income of Rs 1595.50 Crore. Company has reported net profit after tax of Rs 189.38 Crore in latest quarter.

(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)

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