Amara Raja Batteries surges on brokerage upgrades

The stock was up 3% at Rs 340 extending its previous day's nearly 4% rally on the Bombay Stock Exchange.

Amara Raja Batteries is trading higher by 3% at Rs 340, extending its previous day’s nearly 4% rally, in otherwise weak market, after brokerages raise target price.

The stock opened at Rs 331 and hit high of Rs 342, also its lifetime high, on BSE. A combined around 526,604 shares have changed hands on the counter till 1150 hours.

The auto parts and equipment makers has reported strong results for the second quarter ended September 30, 2013 (Q2), beating analyst estimates, led by continued expansion in operating margins.

The EBITDA margins expanded 133bp sequentially (124bp yoy) to 17.6% led by price increases and superior product-mix.

Analyst at Anand Rathi Securities maintains ‘Buy’ rating on the stock with a target price of Rs 367.

“With a good product portfolio, higher replacement exposure and decent industrial demand, Amara Raja Batteries could outperform peers in the auto ancillary segment,” said analyst in a note.

“We expect the company to sustain its strong operating performance and thereby its outperformance relative to Exide Industries, aided by sustained growth in the automotive and industrial battery volumes,” said analyst at Angel Broking in a report. He maintains ‘Accumulate’ rating on the stock.