We would like to share with you details on the stock recommendation to our Alpha and Alpha + members in the month of May’12 – Amara Raja Batteries Ltd (NSE Code – AMARAJABAT) at Rs 150/- (Rs 300/- was the recommendation price, however the stock’s been split from FV – 2.00 to FV – 1.00 since then).
Just to add here, we ourselves and our Alpha/Alpha + members are holding the stock and keep investing some amount every month in the same and we therefore have a vested interest. This report is being shared only for the purpose of information; do not construe the same as buy/sell advice. In case you invest in Amara Raja Batteries, please carry out your own due diligence.
Some basic details on this great brand in the Indian battery segment
Everyone wishes to own a 2-wheeler or a 4-wheeler and every 2/4 wheeler needs a battery. Further, every battery has on an average a life span of 3 years and thus one need to change battery in his/her automobile every 3-4 years.
Similarly, it goes for UPS and their batteries. Thus, manufacturing batteries seems like a good and recurring business and what is most important about batteries industry is its duopoly structure. So why not look at one of the major company that deals in Automotive and industrial batteries.
Amara Raja Batteries (NSE Code – AMARAJABAT), in case the name sets you thinking about this new brand in the segment of batteries apart from the well known Exide and Amaron, it would be interesting to mention here that Amara Raja is the company behind the well known AMARON and QUANTA brand in the segment of automotive and industrial batteries respectively.
Yes, Amara Raja Batteries (ARBL) is the second largest battery maker in India after Exide, and is already challenging Exide’s un-disputed leadership in the automobiles battery segment, while commands a leadership position in the Industrial battery segment.
For finer details, refer the report. I also hope you enjoy the report and acknowledge the fact that company has been able to create a brand equity and convert Indian battery industry from Exide’s monopoly into the duopoly structure.
As with any business, there are certain risks involved and therefore adequate portfolio diversification is recommended.
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