Amara Raja charts Rs 440 cr expansion plan

Last Updated: Mon, Jan 28, 2013 20:11 hrs


Industrial and automotive battery maker Amara Raja Batteries Limited, a subsidiary of the Hyderabad-based Amara Raja Group, is planning to invest Rs 440 crore for capacity expansion in the automotive segment.


“To capitalise on the growth opportunities, we are planning to invest Rs 440 crore to augment capacities in large VRLA battery (valve-regulated lead–acid battery) and automotive four-wheeler product lines over a period of 16-18 months,” Ravi Bhamidipati, executive director of Amara Raja Batteries, said in a press release on Monday.

This investment is in addition to the already approved capital investment of around Rs 304 crore to expand capacities in medium VRLA, automotive four-wheeler and automotive two-wheeler (2W) product lines, he said.

The company on Monday said that it had recorded a 23 per cent growth in profit after tax (PAT) to Rs 80.9 crore in the quarter ended December 31, 2012, as against Rs 65.9 crore in the corresponding quarter last year. Net sales of the company increased 23 per cent to Rs 756.9 crore for the quarter, as against Rs 612.4 crore a year ago.

Jayadev Galla, managing director, Amara Raja Batteries, said, “The company reported double-digit growth both in top line and bottomline despite slack demand from OE customers in the automotive segment, supply challenges for want of capacities in all product lines except two-wheeler batteries and cost escalations. The company is keeping a close watch on cost increases due to power shortage, power tariff hike, rising commodity and fuel prices, and volatility in currency markets.”

With the aftermarket demand expected to pick up in FY14, the company expects to grow above the industry average in the near future. Amara Raja is all set to commence supply of 2W batteries to OEMs (original equipment manufacturers) in a couple of months, the release said.

“We continue to enjoy debt-free status with free cash of over Rs 350 crore as on December 31," K Suresh, chief financial officer, said adding that the capacity expansion programs undertaken in the last 12 months were progressing as per schedule. The market capitalisation of the company has touched Rs 5,000 crore aided by stellar performance during the last six quarters.

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