Amara Raja lines up Rs 190-cr for greenfield project

Hyderabad-based industrial and automotive battery maker Amara Raja Batteries Limited is planning to set up a greenfield project and has earmarked Rs 190 crore for the first phase.

“We are almost reaching the peak capacity of lead processing as per the cap set by the ministry in the existing plant at Tirupati in Chittoor and do not have enough land to expand. Hence, we are moving to a new location with a greenfield project,” K Suresh, chief financial officer, Amara Raja Batteries, told Business Standard.

The project will be two-third (60 per cent) of Tirupati plant in terms of production capacity. The company makes products for four verticals - telecom, UPS, four-wheeler and two-wheeler — at its Tirupati facility.

The plant would be developed in the next five years in three phases, he said.

However, it has not yet zeroed in on the location. According to him, the company will also invest in creating utilities including for creating power, sewerage and water plants.

The company last month expanded its production capacity in the four-wheeler segment to 5.6 million units from 4.2 million units. “Now, the trial runs are on, and we expect the new capacity to support the demand coming in the next 14-16 months,” he said.

In the two-wheeler battery segment, it has increased production to 4.8 million units from 3.6 million units.

The Indian OEM (original equipment manufacturer) market size is 14 million units a year. Amara Raja is selling in the aftermarkets and would start venture into the OEM market from the first quarter of the next financial year, he said. The company is in talks with motorcycle manufacturers in this regard.

Under the UPS segment, it has a capacity of 2 million units per annum.

The company reported revenues and net profit in the third quarter of the current financial year at Rs 612 crore (44 per cent increase as against the same period last year) and Rs 65.9 crore (an increase of 65 per cent) respectively .

“We expect to continue growing in double digit in the next 2-3 years,” Suresh said.

On the products in the pipeline, Suresh said, “We will not focus on new products, but more on multiple product ranges in the same category.”