Industrial and automotive battery major Amara Raja Batteries Limited today announced annual revenue of Rs 34.37 billion (excluding other income) with a growth of 16% in financial year 2013-14 as compared to Rs 29.59 billion in FY13. The profit after tax stood at Rs 3.67 billion, recording a growth of 28% as against Rs 2.87 billion of the previous year. The Earnings Per Share (EPS) for the year grew by 28% from Rs 16.78 to Rs 21.51.
For the fourth quarter of FY 2013-14, the company recorded net sales of Rs 8.85 billion (Rs 8.01 billion for the previous year) and net profit after tax of Rs 800 million (Rs 596 million for the previous year). The Board of the company, which met in Hyderabad today, approved the audited financial statements for the financial year ended March 31, 2014 and recommended a dividend of Rs 3.23 per share (face value of Re 1/- each) in line with the declared policy of distributing up to 15% of profits, subject to the approval of the shareholders at the ensuing annual general meeting.
Automotive Battery Business
The company’s automotive battery business reported double digit revenue growth supported by good volume increase in 4-wheeler and 2-wheeler batteries, over the previous financial year, despite capacity constraints during the year. The year witnessed a flat business in automotive OEM segment, notwithstanding the negative growth in automobile production due to various macro-economic conditions.
The volume growth in both four-wheeler and two-wheeler aftermarket segments was due to strong preference for Company’s products, supported by complete product offering, strengthening of brand and channel, and leveraging customer relationship. The continuing consumer preference for Amaron® and PowerZoneTM enabled gains in market share both in aftermarket and OEM. The Company initiated bulk supplies to two-wheeler OEMs and quickly consolidated the position.
The supply of Amaronand PowerZone branded tubular inverter batteries and Home UPS under private label program enabled to fill the gap in product offering to the channel in the Home UPS segment. Leveraging of brand and channel helped gain in volumes and market share. A separate task force has been created to focus on this business vertical. During the year, the capacity in four-wheeler batteries was enhanced from 5.60 million units to 6.0 million units, and capacity for two-wheeler batteries from 4.80 million units to 8.4 million units per annum.
Industrial Battery Business:
The company’s industrial battery business registered double digit revenue growth over the previous financial year, despite capacity constraint, challenging & competitive market conditions. The growth in demand from telecom sector is primarily driven by data growth and the drive for energy optimisation by tower companies. Amidst these challenges, the industrial battery business improved the overall performance by virtue of its ‘preferred supplier status’ with all major customers, efficient after sales service, customer relationship management and consistent product performance of both PowerStack® and Quanta® batteries.
The Greenfield capacity expansion project in medium VRLA product line was commissioned in Jan 2014 and the brownfield capacity expansion project in large VRLA product line came on stream during February of 2014. Commenting on the full year performance, Jayadev Galla, Vice Chairman and Managing Director, Amara Raja Batteries said, “We are pleased to report yet another highest ever sales and profit for the company for the financial year 2013-14 regardless of supply constraints and slowdown in the automobile industry. Both our industrial and automotive battery units have reported double digit revenue growth and gained market shares. We remain cautiously optimistic of the company’s performance in the coming year, against the back drop of continuing uncertainty in macro-economic condition, escalating costs and probable supply constraints. However, our ability to anticipate and perform with distinct approach will help us to sustain the growth momentum.”
S V Raghavendra, Chief Financial Officer, said, “The company continues to enjoy debt free status and has free cash available to the tune of over Rs 2.50 billion at the end of the financial year. The year under review saw the Company’s market capitalization touching Rs 68 billion with considerable improvement in PE ratio reflecting growing investor confidence. The capacity enhancement project for Industrial batteries business and the two wheeler battery business have been completed and production commenced during the year and the capacity enhancement project in respect of four wheeler battery business is progressing as per schedule. All project costs are well within the approved costs. Continuing debt free status and sound credit rating of the company will help us to leverage, as and when required, at minimal cost”
