Amara Raja Back In Black, Net At Rs 21 Crore

An year after it saw fall of both turnover and net profit due to price competition, Amara Raja Batteries has managed to post a modest recovery in its performance during the fiscal 2000-01.

The company recorded a net profit of Rs 20.53 crore on a sales turnover of Rs 125.94 crore for the year compared with a net profit of Rs 19.53 crore on a sales of Rs 108 crore in the previous year.

On an enhanced equity capital of Rs 11.39 crore, it works out to an earnings per share of Rs 19.64 on pro rata basis. It may be recalled that the company had allotted 11.14 lakh shares on preferential basis at a premium of Rs 90 per share to the promoters and foreign collaborators, Johnson Controls Inc, in January 2001.

The board of directors of the company, which met today in Hanover, Germany, to take on record its annual audited results, has recommended 35 per cent dividend for the year, an increase of five per cent over preceding year.

Due to price competition in the industrial battery segment, where the company is a leading player, the profitability has come down during the fiscal 2000-01. It is reflected in terms of tepid growth of 16.45 per cent in sales, even as its raw material costs went up by 19.34 per cent.

Though there is a marginal fall in operating profit at Rs 30.89 crore compared with Rs 32 crore of previous year, the company could post higher net profit due to the reduced tax liability. For the year ended March 2001, the company made a tax provision of Rs 2.98 crore compared with Rs 6.85 crore paid in the preceding year.

In the automotive batteries segment, where the company made its entry recently, the company said the Amaron range of truck and tractor batteries will be available across the country by next month. It also plans to introduce high-end products for the invertor, genset, motive power and UPS markets during the current year.

"Backed by our alliance with Johnson Controls, we are confident of becoming the leading manufacturer of advanced automotive and industrial batteries in the Indian Ocean Rim," Ramachandra N Galla, chairman and managing director of the company, said.

Volumes spurt

Despite the ongoing probe by the Securities and Exchange Board of India (Sebi) into the alleged price manipulation in Amara Raja Batteries, the scrip clocked huge volumes prior to the announcement of the results.

The scrip saw a volume of 7.5 lakh shares in the last four trading days, with the price surging from Rs 72 on May 15 to over Rs 95.

The spurt in volumes has raised several eyebrows as over the last one month the daily average volumes have been around 4,000-7,000 shares.

The company was in the news following charges of price manipulation after the scrip crashed from Rs 300 levels to Rs 80 levels in five trading sessions in March. The payout for the period is being held back by both the NSE and the BSE since the Sebi probe is on.