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Amara Raja grows 67% Y-o-Y to Rs.745 crore in Gross Revenues; and PAT almost doubles - up 97%.
  • Growth fuelled by surging demand in Telecom, UPS and Automotive battery segments
  • Looks at increasing volume, value and market share in both industrial and automotive battery segments
  • Recommends 35% dividend
  • Proposes Stock Split from Rs.10/- face value to Rs.2/-
  • Two wheeler battery capacity to be operational in Q3 of 07-08

Chennai, June 22, 2007 - Industrial and Automotive Battery major Amara Raja Batteries Limited (BSE Code: 500008 & NSE Code: AMARAJABAT) has announced a remarkable growth with gross revenues for FY 2006-07 soaring 67% to Rs.7451 million compared to Rs.4458 million recorded in the FY ending March 31, 2006.  For the year, the PBT shot up by 91% to Rs.712 million and PAT up by a whopping 97% to Rs.470 million.
 
Rs. Mm
  Fourth Quarter Ended Full Year
  31-Mar-07 31-Mar-06 FY 06-07 FY-05-06
Gross Sales 2414.04 1360.30 7451.03 4458.29
Net Sales 1936.04 1099.64 5958.02 3636.71
PBT 223.50 144.22 711.98 373.46
PAT 152.29  91.90  470.44 238.47

During the year, Industrial VRLA Batteries manufacturing capacity grew nearly 50% with industry leading capacity utilization keeping pace with the escalating demand from the telecom and UPS segments.   Recording a 60% sales growth in Industrial VRLA batteries, the company retained its most preferred supplier status in the segment with a 26% market share in the served market.

The company enjoys a market share of 26 % in Automotive OEM segment and 20% in the organized segment of Aftermarket. Exclusive supplies of Auto batteries for Ford and Tata “ACE” coupled with major presence on new launches like Maruti Zen Estilo, Ford Fiesta and Ford Fusion bear ample testimony to the Technology Leadership of ARBL in OEM segment.

In the Automotive After Market segment, AMARON® continues to maintain the scorching pace it is known for and remains the fastest growing Auto battery brand in India, with volumes increasing 50% y-o-y.  The current manufacturing capacity for automotive batteries is at 4 Million units per annum and expansion plans to reach 5.4 million units are underway. 

ARBL’s initiative to grow exports in the Indian Ocean Rim countries is gaining ground. The company retained its numero uno position in the automotive aftermarket in Singapore, while gaining increasing acceptance in Japan – the most discerning market.

The Company’s plan to manufacture two wheeler batteries and small VRLA batteries for UPS applications announced in January 2007 is on course. On completion of Phase 1, the capacity for two wheeler batteries will stand at 5.74 million per annum.

In May 07, the Company had launched a new retail store format – Powerzone to address the hitherto untapped non- metro markets with a selling proposition of global quality at local prices-- better technology and better service at affordable price. Amara Raja plans to launch 500 Power zone outlets in the country by the end of FY 07-08.

The Board has decided to sub-divide the face value of the equity shares of the company from Rs.10 each fully paidup to Rs.2 each fully paidup, subject to the approval of the shareholders at the forthcoming annual general meeting.

Speaking after the Board Meeting, Mr. Ramachandra N. Galla, Chairman, Amara Raja Batteries Ltd, said: “Our continued focus on driving performance efficiencies has helped us achieve the planned growth.  What is remarkable is that it has been achieved despite the pressures owing to the unrelenting escalation of lead prices during the year.  Exploding demand in the telecom and UPS segments and steady rise in consumer preference to our brands in Automotive segment will continue to propel our growth.”

“The proposed stock split will increase liquidity, leading to rise in market capitalisation and thus shareholder value,” Mr. Ramachandra Galla observed.

Mr. Jayadev Galla, Managing Director, Amara Raja Batteries Ltd., said: “We have been able to achieve our growth by tapping into surging demand in both industrial and automotive battery segments, aided by our timely capacity expansion. Now, we are looking at leading the two wheeler battery segment and SVRLA with advanced technology and innovation. We expect that the year ahead remains to be promising with healthy demand in both industrial and automotive battery segments.  Our newly launched Powerzone initiative and the two wheeler battery entry will help us tap newer markets and feed both top line and bottom line,” observed Mr. Jayadev Galla.

“The continuing upsurge in lead price is a concern area.  Thanks to our valued customers and to our long standing track record, we have managed to share the increased costs. In the recent months, rupee appreciation against the dollar has been favourable to us in offsetting part of the cost increase in Lead,” Mr. Jayadev Galla added.

Mr. Suresh K, Financial Controller, Amara Raja Batteries, said: “Internal accruals and term loans secured at competitive rates will comfortably support our expansion plans.”  

Media Contact
Vanitha Nav Jain
Ogilvy Public Relations Worldwide
Phone: +91 9940544411
E-mail:vanitha.jain@ogilvy.com

About Amara Raja

Amara Raja Batteries Limited,an Amara Raja-Johnson Controls Company with 26% equity from Johnson Controls, is the technology leader in the Indian storage battery industry, manufacturing batteries for both Industrial and Automotive applications.

In India, Amara Raja is the preferred supplier to major telecom operators and equipment manufacturers, Indian Railways and a range of industry segments including Power, Oil & Gas and UPS applications. Amara Raja manufactures and sells automotive batteries under the brand name Amaron® which is distributed through a large pan-India sale-service retail network.

The company supplies automotive batteries under OE relationships to Ashok Leyland, Fiat, General Motors, Hindustan Motors, Honda, Mahindra & Mahindra, Maruti, Hyundai & Tata Motors. The company is an exclusive supplier to Daimler Chrysler, Ford and Swaraj Mazda. The Company’s Industrial and Automotive batteries are exported to APAC, Africa and the Middle East.

Johnson Controls is a global leader in interior experience, building efficiency and power solutions. The company provides innovative automotive interiors that help make driving more comfortable, safe and enjoyable. For buildings, it offers products and services that optimize energy use and improve comfort and security. Johnson Controls also provides batteries for automobiles and hybrid electric vehicles, along with systems engineering and service expertise. Johnson Controls (NYSE: JCI), founded in 1885, is headquartered in Milwaukee, Wisconsin. Its sales for 2006 totaled US$ 32.24 billion.

Safe Harbor
Some of the statements in this news release that are not historical facts are forward-looking statements. These forward-looking statements include our financial and growth projections as well as statements concerning our plans, strategies, intentions and beliefs concerning our business and the markets in which we operate. These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. These risks include, but are not limited to, the level of market demand for our products, the highly-competitive market for the types of products that we offer, market conditions that could cause our customers to reduce their spending for our products, our ability to create, acquire and build new businesses and to grow our existing businesses, our ability to attract and retain qualified personnel, currency fluctuations and market conditions in India and elsewhere around the world, and other risks not specifically mentioned herein but those that are common to industry.





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