Amara Raja Energy & Mobility (500008) Q4 99/00 earnings summary

Executive summary

• Unprecedented industrial battery price competition reduced annual sales and profits, while operational efficiencies supported margins described as above global industry averages.

• Leadership in industrial VRLA batteries continued, with reported market share above 42%; automotive aftermarket operations began during the year.

• Automotive expansion advanced through the Amaron launch, new OEM business and investment in a modern manufacturing plant and battery technology center.

Financial highlights

• Sales were ₹1,320.81 million versus ₹1,865.46 million in FY1998-99; other income rose to ₹59.91 million from ₹42.38 million.

• Profit before interest, depreciation and tax was ₹320.11 million versus ₹622.45 million; profit before tax was ₹263.83 million versus ₹573.02 million.

• Profit after tax was ₹195.36 million versus ₹438.94 million; earnings per share were ₹19.02 versus ₹42.73.

• Operating cash flow was ₹168.30 million; investing activities used ₹205.60 million and financing activities used ₹45.15 million. Cash and bank balances closed at ₹316.02 million versus ₹398.47 million.

Outlook and guidance

• Industrial battery market expected to accommodate more competitors; growth opportunity seen despite heightened competition, with market share targeted to remain above 42%.

• FY2000-01 expansion investment planned at ₹15.476 million for Industrial Batteries and ₹40.698 million for SLI, funded from internal accruals.

• Automotive aftermarket operations planned for 15 cities nationally in FY2000-01, extending the network beyond five metros.

• Further VRLA, UPS, emergency-lighting and automotive battery products were planned, including DIN and heavy-duty JIS ranges and designs for electric and hybrid vehicles.