Indian battery maker Amara Raja's Q2 profit rises on steady automotive demand

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Amara Raja Energy & Mobility, an Indian battery manufacturer, announced a 6.3% increase in its second-quarter earnings on Monday, attributed to sustained interest from automotive companies.

For the quarter ending on September 30, the company saw an increase in its net profit, reaching 2.41 billion rupees ($28.7 million), up from 2.26 billion rupees in the same period last year.

In the past year, this marks the slowest quarterly profit growth for the company, attributed to car manufacturers scaling back deliveries to dealers in efforts to trim excessive inventory levels.

Exide Industries’ competitor also experienced a lower-than-anticipated profit announcement earlier on the same day as a consequence.

In the September quarter, there was a 9% rise in India’s overall vehicle manufacturing, a slowdown from the 16.1% growth seen in the initial quarter, as reported by the Society of Indian Automobile Manufacturers (SIAM), a prominent industry association.

Amara Raja, a company that generates nearly 75% of its revenue from the automotive battery sector, boasts prestigious automakers such as Bajaj Auto, Hero MotoCorp, and Maruti Suzuki in its clientele list.

Amara Raja witnessed a modest 11.6% uptick in revenue to reach 31.36 billion rupees in the July-September period, marking its most sluggish growth since the December quarter.

Analysts attribute the growth to the company’s aftermarket sector, encompassing the replacement of original equipment batteries, and an increase in its two-wheeler battery division.According to analysts, the company’s growth was fueled by its aftermarket sector, encompassing the replacement of original equipment batteries, along with an uptick in its two-wheeler battery division.

Before the release of its results, Amara Raja saw its shares closing 2.2% down. The company’s stocks have surged by 68.4% since the beginning of the year, whereas Exide Industries witnessed a 40% increase in its share value.

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