Amara Raja registers over 35 per cent year-on-year growth

#dailynews60 : Amara Raja Batteries said that its manufacturing facilities had reached nearly 100 per cent capacity utilisation in order to keep up with the rising demand. The company said the aftermarket was seeing strong pent-up demand and the industrial segment was seeing demand from the telecom and commercial UPS market segments on the back of enhanced priorities for keeping data network uptime at near 100 per cent.

S Vijayanand, CEO, Amara Raja Batteries Limited said, “We have been operating all our manufacturing facilities at near 100% capacity utilisation to keep pace with the demand ramp up. There have been some delays in the capacity expansion programmes in the last couple of quarters due to Covid restrictions and we are working in a focused manner to complete these projects which should help us debottleneck supply constraints in the coming months. It is very heartening to see all the employees and business partners rise to the occasion to put in their best effort to meet the challenges posed by the pandemic.”

The company registered a 35 per cent year-on-year growth in inverters and 40 per cent growth in 2W batteries, driven by 110 per cent growth in OEMs and 15% in the replacement market. Four wheeler batteries registered 4% growth on 11% growth in the replacement business.

“We believe that the capacity constraints of other companies in the market are benefitting Amara and we expect further market-share gains as punch-grid technology gains acceptance,” said research firm Anand Rathi Communications. They expect both OEM and the replacement business to gain market shares. Also, the company’s entry into tower-monitoring systems (currently addressing 550 towers) augurs well for a new revenue stream for its industrial business.

The company said that in the automotive segment, both the OEM and aftermarket demand saw a sharp raise. Vehicle production saw a month-on-month rebound to refill the dealer inventories and gear up for demand during the upcoming festive season. Personal mobility preferences also saw increased purchase of 2W and entry level passenger vehicles. The aftermarket saw strong pent-up demand sustaining after the lifiting of initial lockdowns and with easing of logistics, channel sales and distribution activities were streamlined to meet the demand.

Industrial business continued to see sustained demand from telecom and commercial UPS market segments on the back of enhanced priorities for keeping the data network uptimes near 100%.

Exports of automotive batteries and industrial batteries also saw an upsurge as markets across the geographies opened up.

An analyst report quoting the management stated the capex was at Rs 450–500 crore for FY21, (earlier guidance of Rs 400 crore) as the company expanded 4W (2m units) and 2W (2–3m units) capacities.