The current stock prices of Amara Raja Batteries and Exide Industries offer a favourable risk-to-reward ratio to investors, given their strong standing
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PRO Only Highlights
– Quarterly performance largely backed by improved realisations
– Medium-term triggers China plus and protectionist measures for tyre industry
– Valuations not inexpensive; but improved medium-term outlook
Amara Raja Batteries Ltd (CMP: Rs 618; MCap: Rs 10,561 crore) and Exide Industries (CMP: Rs 160, MCap: Rs 13,583 crore), the two largest battery manufacturers in the listed space, have corrected 39 percent and 29 percent, respectively, from their 52-week highs in February 2021, thanks to the concerns about the severe shortage of semiconductor chips. The shortage led to falling demand from original equipment manufacturers (OEMs) and rising commodity-linked cost pressure, hitting the profitability of the companies. Further, the…
