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Revenue up 16% yoy: Amara Raja’s 4Q FY11 revenue rose 16% yoy (+18% qoq) to Rs5bn, led by robust demand from
the auto segment – both OEM and replacement.
Rising cost pressure hurt margin: The price of lead was up 7% qoq (+15%yoy) in 4Q FY11. As a result, RM / sales
increased 260bps qoq (+100bps yoy) to 67.1%. However, lower staff costs and lower-than-expected other income
arrested the margin decline. Reported staff costs in 4Q were at Rs180m (against 9M average of Rs198m). Other exp /
revenue ratio at 14.8% was also lower than the 9M average of 15.6%. On account of the sharp increase in input costs,
margin for the quarter declined 110bps qoq (flat yoy) to 14.5%.
Adjusted net profit up 10% (22%yoy) at Rs397m: Absolute EBITDA was up 10% qoq (+15% yoy) led by strong
revenue growth. Adjusted for the translation gain of Rs19.6m reported in the quarter, adjusted profit grew 22.4% yoy to
Rs424m (+10% qoq).
Sharp rise in input costs hurts FY11 performance, earnings down 7% yoy at Rs1.5bn: FY11 revenue rose 20%
yoy to Rs17.6bn. Strong demand from the automobile segment (both OEM and replacement) offset the slowdown in the
industrial segment, particularly telecom. However, the sharp increase in raw material costs (lead prices up 12% yoy), led
to a 550bps increase in RM / revenue ratio. As a result, operating margin declined 500bps yoy to 14.6%. As a result,
adjusted net profit declined 7% yoy to Rs1.5bn.
Valuation: Our estimates factor in a strong 27% yoy revenue growth in FY12 and stable margin at 14.6%. The stock
appears fully valued at 9.4x FY12E earnings and at 5x EV/EBITDA. With no near-term trigger for the stock, we maintain
IN-LINE.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Revenue up 16% yoy: Amara Raja’s 4Q FY11 revenue rose 16% yoy (+18% qoq) to Rs5bn, led by robust demand from
the auto segment – both OEM and replacement.
Rising cost pressure hurt margin: The price of lead was up 7% qoq (+15%yoy) in 4Q FY11. As a result, RM / sales
increased 260bps qoq (+100bps yoy) to 67.1%. However, lower staff costs and lower-than-expected other income
arrested the margin decline. Reported staff costs in 4Q were at Rs180m (against 9M average of Rs198m). Other exp /
revenue ratio at 14.8% was also lower than the 9M average of 15.6%. On account of the sharp increase in input costs,
margin for the quarter declined 110bps qoq (flat yoy) to 14.5%.
Adjusted net profit up 10% (22%yoy) at Rs397m: Absolute EBITDA was up 10% qoq (+15% yoy) led by strong
revenue growth. Adjusted for the translation gain of Rs19.6m reported in the quarter, adjusted profit grew 22.4% yoy to
Rs424m (+10% qoq).
Sharp rise in input costs hurts FY11 performance, earnings down 7% yoy at Rs1.5bn: FY11 revenue rose 20%
yoy to Rs17.6bn. Strong demand from the automobile segment (both OEM and replacement) offset the slowdown in the
industrial segment, particularly telecom. However, the sharp increase in raw material costs (lead prices up 12% yoy), led
to a 550bps increase in RM / revenue ratio. As a result, operating margin declined 500bps yoy to 14.6%. As a result,
adjusted net profit declined 7% yoy to Rs1.5bn.
Valuation: Our estimates factor in a strong 27% yoy revenue growth in FY12 and stable margin at 14.6%. The stock
appears fully valued at 9.4x FY12E earnings and at 5x EV/EBITDA. With no near-term trigger for the stock, we maintain
IN-LINE.
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