This document provides an investment recommendation on Amara Raja Batteries Ltd (AMARAJABAT) for May 2012. It discusses AMARAJABAT's business operations including its two divisions of industrial and automotive batteries. AMARAJABAT is India's second largest battery manufacturer and has a partnership with Johnson Controls Inc., the world's largest automotive battery manufacturer. The document analyzes AMARAJABAT's financial performance, capacity expansion plans, and growth opportunities in the automotive battery market to recommend the stock as a buy.
Atul Auto is one of the leading manufacturers of 3 wheelers from the state of Gujarat. After attaining leadership position in Gujarat and Rajastha, the company is expanding its presence on pan-India basis
Established in 1991 and listed on BSE in 1993, Control Print Limited is one of India’s leading Industrial Coding & Marking Solutions provider and the only Indian manufacturer of Continuous Inkjet Printers (CIJ) and consumables under license of KBAMetronic
AG, Germany at its facility in Nalagarh, Himachal Pradesh.
Prior to Control Print’s tie-up with KBA-Metronic AG, it was one of the largest distributors of Videojet CIJ printers in India and Nepal.
Besides CIJ Printers, the company also manufactures Large Character Printers, Electrograph Digital Printers, Thermal Transfer Over printers (TTO), Hot Ink Coders and
their consumables in collaboration with respective technology leaders. The laser range of printers at Control Print is supported by MACSA Lasers. MACSA has over 90 years of experience and are market leaders for Laser Solutions internationally.
Symphony is the leading company in India in the air-coolers business and commands ~50% market share in the organized segment.
We like companies that have leadership position or are amongst top 3 in their respective industries as it is reflective of the quality of management, their ability to outgrow competition and with leadership position the companies also get advantages of scale, brand recognition, etc.
Consider this, while the company commands 50% market share, it accounts for ~70% of the profitability of the industry. Thus, as mentioned above, the company clearly has the advantage of scale and brand recognition enabling it to generate much higher profitability than its competitors.
Besides, the company is debt free with surplus cash to the tune of 150 crores (invested in various debt schemes) and only 80-90 crores has been employed in the core business with return in excess of 95% on the capital employed.
Century Plyboards is India’s leading wood-panel Company. It operates mainly in two segments: plywood and laminates. Plywood brings in ~76% of its revenues, laminates about 18%. Container Freight Stations (CFS) account for the remaining.
The company has six plywood manufacturing plants spread across the length and breadth of India and one in Myanmar. It is among the top-three laminate manufacturers with capacity of 4.8m sheets and it also has two container-freight stations at the Kolkata port.
Over the last 30 years the company has emerged as a dominant player in the decorative plywood industry with more than 25% share of the organised market worth 4,500 crores. Against the plyboard industry growth rate of 12% for the last 6 years, Century Plyboard has recorded 18% CAGR led by market share gains from the unorganised segment.
Century Ply has also established itself as one of the leading laminate brands in India (third-largest manufacturer in India after Greenply and Merino) and its laminate revenue recorded a 15% CAGR over FY09-14.
It’s important to note here that of the total plywood industry (15,000 crores +), the share of organized players is still 30%, though it has increased from 10% a decade back. As is being witnessed in other industries, the share of organized players is expected to inch up further from 30% and if GST is implemented then the gain in market share will be much faster. With strong entry barriers (Govt. licensing as a hedge against de-forestations and difficulty in sourcing raw material) the incumbent organized players like Century will be the key beneficiaries of the shift towards branded products.
In order to sustain the growth momentum, the company recently doubled its laminates capacity to 4.8m sheets and increased the plywood capacity to 210,000 CBM. It has also increased its dealer’s base from 1,106 in FY12 to 1,424 in FY14.
As per the management, they are experiencing good demand for their products and expect to sustain 25% + CAGR for the next few years and have in-fact set an ambitious target of 5000 crores revenue by 2020 (1,284 crores in FY 14).
Atul Auto is one of the leading manufacturers of 3 wheelers from the state of Gujarat. After attaining leadership position in Gujarat and Rajastha, the company is expanding its presence on pan-India basis
Established in 1991 and listed on BSE in 1993, Control Print Limited is one of India’s leading Industrial Coding & Marking Solutions provider and the only Indian manufacturer of Continuous Inkjet Printers (CIJ) and consumables under license of KBAMetronic
AG, Germany at its facility in Nalagarh, Himachal Pradesh.
Prior to Control Print’s tie-up with KBA-Metronic AG, it was one of the largest distributors of Videojet CIJ printers in India and Nepal.
Besides CIJ Printers, the company also manufactures Large Character Printers, Electrograph Digital Printers, Thermal Transfer Over printers (TTO), Hot Ink Coders and
their consumables in collaboration with respective technology leaders. The laser range of printers at Control Print is supported by MACSA Lasers. MACSA has over 90 years of experience and are market leaders for Laser Solutions internationally.
Symphony is the leading company in India in the air-coolers business and commands ~50% market share in the organized segment.
We like companies that have leadership position or are amongst top 3 in their respective industries as it is reflective of the quality of management, their ability to outgrow competition and with leadership position the companies also get advantages of scale, brand recognition, etc.
Consider this, while the company commands 50% market share, it accounts for ~70% of the profitability of the industry. Thus, as mentioned above, the company clearly has the advantage of scale and brand recognition enabling it to generate much higher profitability than its competitors.
Besides, the company is debt free with surplus cash to the tune of 150 crores (invested in various debt schemes) and only 80-90 crores has been employed in the core business with return in excess of 95% on the capital employed.
Century Plyboards is India’s leading wood-panel Company. It operates mainly in two segments: plywood and laminates. Plywood brings in ~76% of its revenues, laminates about 18%. Container Freight Stations (CFS) account for the remaining.
The company has six plywood manufacturing plants spread across the length and breadth of India and one in Myanmar. It is among the top-three laminate manufacturers with capacity of 4.8m sheets and it also has two container-freight stations at the Kolkata port.
Over the last 30 years the company has emerged as a dominant player in the decorative plywood industry with more than 25% share of the organised market worth 4,500 crores. Against the plyboard industry growth rate of 12% for the last 6 years, Century Plyboard has recorded 18% CAGR led by market share gains from the unorganised segment.
Century Ply has also established itself as one of the leading laminate brands in India (third-largest manufacturer in India after Greenply and Merino) and its laminate revenue recorded a 15% CAGR over FY09-14.
It’s important to note here that of the total plywood industry (15,000 crores +), the share of organized players is still 30%, though it has increased from 10% a decade back. As is being witnessed in other industries, the share of organized players is expected to inch up further from 30% and if GST is implemented then the gain in market share will be much faster. With strong entry barriers (Govt. licensing as a hedge against de-forestations and difficulty in sourcing raw material) the incumbent organized players like Century will be the key beneficiaries of the shift towards branded products.
In order to sustain the growth momentum, the company recently doubled its laminates capacity to 4.8m sheets and increased the plywood capacity to 210,000 CBM. It has also increased its dealer’s base from 1,106 in FY12 to 1,424 in FY14.
As per the management, they are experiencing good demand for their products and expect to sustain 25% + CAGR for the next few years and have in-fact set an ambitious target of 5000 crores revenue by 2020 (1,284 crores in FY 14).
CARE is a Credit Rating, Research and Information Services company promoted in 1993 by major banks/financial institutions (FIs) in India.
CARE’s operations can be divided into two divisions: Credit Rating and Research & Information Services. It offers a wide range of rating and grading services across a diverse range of instruments and industries and also provides general and customized industry research reports on subscription basis; however CARE’s rating business accounts for more than 98% of its revenue and profits.
Despite starting four years after ICRA, CARE is now the second largest credit rating agency in India in terms of revenue.
AIA Engineering was incorporated in 1978 as Ahmedabad Induction Alloys Pvt. Ltd. In 1992 AIA Magotteaux Pvt. Ltd was formed as JV between Magotteaux (world’s largest player in high chrome mill internals (HCMI)) and AIA. In 2001 the JV ended and the company got renamed as AIA Engineering Ltd as AIA’s promoters bought the Magotteaux’s stake.
AIA is now the second largest high chrome mill internals producer in the world. It manufactures grinding media, liners and diaphragms which are collectively known as
Mill Internals. These are used in crushing and grinding operations in cement, power utility, and mining industries
The sectors that are likely to benefit from GST will include Logistics, Consumer durable, Automobile, Multiplexes and Ply wood Industries.
We at Sublime Advisory have identified 5 stocks that would benefit from the passage of GST which would be potential game changers for these companies.
Rane (Madras): Buy at CMP and add on dips to Rs274-Rs295IndiaNotes.com
The Automobile and auto ancillaries space is on the verge of exciting times. RML is well placed to capitalize on these opportunities. Investors could look at buying RML at the CMP (Rs336.35) and add on dips in Rs274-295 band for a target of Rs442 over 2-3 quarters.
Prima Plastics, as the name suggests manufactures plastic moulded furniture (PMF). The company manufactures products ranging from chairs, baby chairs, dining tables, stools, teapoys, material handling products etc and competes with the likes of Nilkamal, Wimplast, and several unorganized players.
Till recently the company also had another business line of Aluminum Composite Panels (ACP), however the same was consistently reporting losses and in FY 15 the management
decided to close the same.
The company sells its products through a network of ~200 distributors and over 2000 dealers across India and operates manufacturing facilities in Daman and in Kerala. Besides
domestic sales, company also exports its products mainly to Africa, Middle-East and Central America.
Further, Prima Plastics also has a 50:50 joint venture (JV) in Cameroon, Africa by the name of Prima Dee-lite Plastics and the same manufactures PMF and HDPE Woven Sack Bags
for sale in Cameroon.
CARE is a Credit Rating, Research and Information Services company promoted in 1993 by major banks/financial institutions (FIs) in India.
CARE’s operations can be divided into two divisions: Credit Rating and Research & Information Services. It offers a wide range of rating and grading services across a diverse range of instruments and industries and also provides general and customized industry research reports on subscription basis; however CARE’s rating business accounts for more than 98% of its revenue and profits.
Despite starting four years after ICRA, CARE is now the second largest credit rating agency in India in terms of revenue.
AIA Engineering was incorporated in 1978 as Ahmedabad Induction Alloys Pvt. Ltd. In 1992 AIA Magotteaux Pvt. Ltd was formed as JV between Magotteaux (world’s largest player in high chrome mill internals (HCMI)) and AIA. In 2001 the JV ended and the company got renamed as AIA Engineering Ltd as AIA’s promoters bought the Magotteaux’s stake.
AIA is now the second largest high chrome mill internals producer in the world. It manufactures grinding media, liners and diaphragms which are collectively known as
Mill Internals. These are used in crushing and grinding operations in cement, power utility, and mining industries
The sectors that are likely to benefit from GST will include Logistics, Consumer durable, Automobile, Multiplexes and Ply wood Industries.
We at Sublime Advisory have identified 5 stocks that would benefit from the passage of GST which would be potential game changers for these companies.
Rane (Madras): Buy at CMP and add on dips to Rs274-Rs295IndiaNotes.com
The Automobile and auto ancillaries space is on the verge of exciting times. RML is well placed to capitalize on these opportunities. Investors could look at buying RML at the CMP (Rs336.35) and add on dips in Rs274-295 band for a target of Rs442 over 2-3 quarters.
Prima Plastics, as the name suggests manufactures plastic moulded furniture (PMF). The company manufactures products ranging from chairs, baby chairs, dining tables, stools, teapoys, material handling products etc and competes with the likes of Nilkamal, Wimplast, and several unorganized players.
Till recently the company also had another business line of Aluminum Composite Panels (ACP), however the same was consistently reporting losses and in FY 15 the management
decided to close the same.
The company sells its products through a network of ~200 distributors and over 2000 dealers across India and operates manufacturing facilities in Daman and in Kerala. Besides
domestic sales, company also exports its products mainly to Africa, Middle-East and Central America.
Further, Prima Plastics also has a 50:50 joint venture (JV) in Cameroon, Africa by the name of Prima Dee-lite Plastics and the same manufactures PMF and HDPE Woven Sack Bags
for sale in Cameroon.
GIC Housing Finance Ltd (GICHF) was incorporated as ‘GIC Grih Vitta Limited’ on 12th December 1989. The name was changed to GICHF on 16th November 1993. It’s promoted by well known domestic re-insurer General Insurance Corporation (GIC) and is a well-known company in India’s Housing Finance market.
The Company was formed with the objective of entering into the field of direct lending to individuals and other corporate to accelerate the housing activities in India. The primary business of GICHF is granting housing loans to individuals and to persons/entities engaged in construction of houses/flats for residential purposes.
We like the company on account of its steady well managed growth in a growing market. The company has become slightly aggressive in terms of expansion into states other than Maharashtra and has been consistently adding new branches outside Maharashtra. The company also seems to have managed its loan book well and has made adequate provisions. GICHF is trying to reduce the share of bank borrowings and the same will help in reducing cost of funds with consequent improvement in net interest margins (NIM).
Aarti Drugs Limited (ADL), incorporated in 1984 is part of Rs 3,000 crore Aarti Group of
Industries and is engaged in manufacturing and sale of Active pharmaceutical ingredients
(APIs), advanced intermediates and specialty chemicals. ADL manufactures drugs in
therapeutic segments such as anti-arthritis, anti-fungal, antibiotics, anti-diabetic, sedatives,
anti-depressant, anti-diarrhea and anti-inflammatory.
In Aarti Drugs we get a bulk drugs manufacturer with steady growth across the years,
continuously improving performance on various financial parameters, good dividend
yield of more than 5% and low valuations of 5 times earnings and EV/EBIT of 5.28.
Besides, what instills further confidence in the stock is the fact that promoters of the
company have been continuously increasing their stake with regular purchases from open
market. Two years back promoters had 54.83% stake in the company and the same now
stands increased to 59.65%.
Can Fin Homes Ltd (NSE Code - CANFINHOME) - May'13 Katalyst Wealth Alpha reco...Katalyst Wealth
Housing Finance companies have played a very vital role in the last 10 odd years in helping individuals buy their dream homes. We believe, besides getting your houses financed, one can also consider starting investing at a young age in fundamentally strong, fast growing and reasonably valued companies from the Housing finance space so as to reduce the quantum and the tenure of your home loan at the time of buying your house.
HDFC, Gruh Finance, LIC Housing Finance are some of the very well known listed Housing Finance companies, however we would like to share details with you on another
Housing Finance stock i.e. Can Fin Homes Ltd (NSE Code – CANFINHOME) which until recently was growing at 7-8%, however the renewed focus from the management and the aggressive branch expansion promises better growth prospects for the next few years.
Can Fin Homes Ltd (NSE Code – CANFINHOME) – Promoted by Canara Bank (42.38% stake), Can Fin pre-dominantly offers loans for home purchase, home construction, home improvement/extension and site purchase as well as non-housing finance loans such as
Personal loans, Child education loans, etc. Housing loans constitute ~98% of the advances of the company.
Promoted by Chaman Lal Setia, Vijay Setia and Rajeev Setia, Chaman Lal Setia Exports Limited (CLSE) was incorporated as a partnership firm in 1975, under the name Chaman Lal & Sons. In 1995, it went public under its present name to finance the expansion and modernisation of the units.
CLSE is engaged in the business of milling and processing of basmati rice. The company has a paddy unit in Karnal (Haryana) and Amritsar (Punjab) with a rice processing capacity (including both milling and sorting) of 14 tonnes per hour. The company also has a rice grading and sorting facility in Delhi.
We like the company on several fronts, though at the same time one will have to be watchful of risks/concerns as discussed in the risks/concerns section below.
As far as positives are concerned we like the way the operating performance of the company has shaped up over the years, company’s increasing focus on exports, increasing focus on improving the share of branded sales under “Maharani” brand, induction of third generation promoters, high promoter holding, well managed working capital and lastly the valuations.
Dynemic Products is India’s leading manufacturer and exporter of complete range of Food colours, Lake colours, Blended colours, & US-FDA certified FD&C colours & Dye Intermediates.
Developing a report on Marketing based on primary and secondary research as a partial fulfillment of the curricular requirement of the Cardiff MBA program covering areas of Market Share, Size, Growth, STP, Global Environment, Porters 5 Forces model, & 7p's practices, Critical Success Factors etc on “Royal Enfiled”.
The global lead acid battery market is to increase from US$ 48.2 billion in 2020 to US$ 62.0 billion by 2025 with a compound annual growth rate (CAGR) of 5.2% for the period 2020-2025. Some of the prominent players in the lead acid battery market are Advanced Stored Energy Solutions, Chaowei Power Holdings Limited, Clarios Llc , Crown Battery Manufacturing Company, Exide Industries Ltd , Exide Technologies, Gs Yuasa Corporation., Hbl Nife Power Systems Limited, Narada Power Source Co., Ltd., Panasonic Corporation. The research report on the global lead acid battery market provides extensive competition analysis and competitive conditions. The report includes information on significant products, players, challenges and developments, and other information specific to the lead acid battery market. The global economy is highly affected by the COVID-19. Various sectors in the economy are much affected by this pandemic. It is anticipated that the global economy will decline because of the loss of trillions of dollars. The growing extension and imposition of lockdown in various countries directly affect the economy all over the world. The report consists of a chapter that provides a detailed study of the impact of COVID-19 on the lead acid battery market. The data in this report is targeted for business and industry practitioners and specifically intended to assist in the explanation, direction, and to understand the potential of the lead acid battery markets. The study focuses on providing readers with an understanding of developments in the industry, market segments, market forecasts, leading players, and market drivers and inhibitors.
Lead Acid Battery Manufacturing Industry. Production of Lead Acid Storage Battery
India Lead Acid Battery market is projected to reach $ 7.6 billion by 2023.
The battery which uses sponge lead and lead peroxide for the conversion of the chemical energy into electrical power, such type of battery is called a lead acid battery. The lead acid battery is most commonly used in the power stations and substations because it has higher cell voltage and lower cost.
Lead acid batteries are used as a power source for vehicles that demand a constant and uninterruptible source of energy. Just about every vehicle today does. For example, street motorcycles need lights that operate when the engine isn’t running. They get it from the battery. Accessories such as clocks and alarms are battery-driven.
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Comparative analysis of an automobile companyAnubhav Sokhal
This ppt presentation is about the comparative analysis of one of the Major Automobile parts manufacturing company. In this presentation comparison between two major players of automobile sectors is provided.
we take immense pleasure to introduce ourselves as Marathon Batteries Pvt.Ltd, the prominent name in Lead Acid Battery Solutions from India and the one of the most respected brand name.We are the largest original equipment manufacturer for one of the top three battery companies and Various Photovoltaic /Inverter /and many more major companies and customer’s in India.
Marathon Batteries Pvt Ltd. is an ISO 9001:2008,14001:2005,CE certified company engaged in manufacturing of all type of Lead Acid Batteries.
Marathon product details given as below :
1) AutoMotive batteries - AutoZone/Motolite ( 12 Volt Monoblock)
2) Stationary Tubular batteries @C10 - Maxxima ( 12 Volt Monoblock)
3) Stationary Tubular batteries @C20 - Force(12 Volt Monoblock)
4) Tubular Gel @C10 - Super G ( 12 Volt Monoblock)
5) Thick Plate Batteries @C20 - Infinity ( 12 Volt Monoblock)
6) Stationary Tubular Batteries @C10 -Energy( 2 Volt Cell)
7) SMF batteries C20 -Proton( 12 Volt Monoblock)
Further please note that our Solar Tubular Flooded Batteries are MNRE approved as per IS 13369 (Capacity Rating, Charge Efficiency & Self Discharge Test).
Similar to Amara Raja Batteries Ltd (NSE Code AMARAJABAT) - May'12 Katalyst Wealth Alpha Recommendation (20)
A special situation refers to particular circumstances involving a security that would compel investors to buy the security based on the special situation, rather than the underlying fundamentals of the security. This type of investment is an attempt to profit from a potential rise in valuation that the special situation presents. There could be a near-term catalyst to quickly gain from the resolution of a special situation, or it could take many months or years.
Special situation investment opportunities can take many forms and involve multiple asset classes. Typical special situations can arise from spinoffs, tender offers, mergers and acquisitions, bankruptcy or distress, litigation, capital structure dislocations, activism, or just complexity that the market does not understand.
Aarti Drugs (ADL) is a part of well known Aarti group of industries. The Company is engaged in the manufacturing of Active Pharmaceutical Ingredients (APIs), Pharma Intermediates, Specialty Chemicals and also manufactures formulations through its wholly-owned subsidiary- Pinnacle Life Science Private Limited.
The company has a long standing track record in the bulk drugs industry and has been supplying products to demanding domestic and international customers.
Promoted by Mr. Venkat Jasti, Suven is one of the very few companies in India focused on new drug discovery on its own and in partnership with several innovator companies.
The Hyderabad based company basically focuses on CRAMS (contract research and manufacturing services) and assists global innovators in drug development by supplying intermediates for relevant new chemical entities (NCEs) during the clinical phase of drug development. The projects undertaken by the Company include process research, custom synthesis and intermediate manufacturing.
We are looking at Suven from long term investment perspective as drug discovery in itself is a very long cycle. As explained in the business section below, we believe movement of only few projects of the company to higher phases or to commercialization phase can result in substantial increase in sales of the company. Also, while new drug discovery has very low probability of success, more so in the case of CNS, we believe there can be good upside if the company’s SUVN-502 is able to successfully move to Phase III of clinical trials
Orient Refractories manufactures a wide range of Refractory and Monolithic products for the iron and steel industry and its clients include large domestic integrated steel producers and mini steel plants such as Steel Authority of India, Mukund Steel, Tata Iron and Steel Company, RINL – Vizag, Sunflag Iron, Lloyd Steel, Usha Martin and the Jindal Group.
ORL got listed recently as it entered into a Scheme of Arrangement with Orient Abrasives Limited (OAL) and their respective shareholders for demerger of the refractory business of OAL into Orient Refractories Ltd. The demerger was carried out in Nov’11 and the stock got listed on 9th Mar’12.
Soon thereafter, there was a change in management and shareholding control in the company. In Mar’13, Mr. S G Rajgarhia and other ex-promoters of the company sold their 43.62% stake in the company to Dutch US Holding B.V. at Rs 43/- per share and the latter also acquired another 26% equity shares from public shareholders through open offer. As on date Dutch US Holding B.V. holds 69.62% equity in the company. It is important to note here that Dutch US Holding B.V. is promoted by RHI AG.
Swaraj Engines (SEL) was set up by the Punjab government’s industrial development arm in 1986, in technical and financial collaboration with Kirloskar Oil Engines Ltd (KOEL). It was set up to manufacture diesel engines for sole supply for “Swaraj” brand of tractors
manufactured by Punjab Tractors (PTL). After several rounds of ownership changes, both PTL and Swaraj Engines are now controlled by India’s largest tractors company, Mahindra and Mahindra (M&M).
Swaraj Engines (SEL) manufactures 20-50 horsepower (HP) engines for “Swaraj” tractors division of Mahindra and Mahindra Ltd (M&M). Besides, it also supplies hi-tech engine components to SML Isuzu Ltd for assembly of commercial vehicle engines; however this division’s contribution to the turnover is very low at about 4-5%.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
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Tele-gram
@Pi_vendor_247
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Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
1. Amara Raja Batteries Ltd (NSE Code: AMARAJABAT) – Alpha/Alpha
+ stock recommendation for May’12
www.katalystwealth.com
2. Content Index
1. Investment Snapshot
2. Amara Raja Batteries Ltd – An Introduction
3. Johnson Controls Inc.
4. Business Units
5. Brand Building
6. Performance Snapshot
7. Operating efficiency
8. Capacity & Sales expansion
9. Management & Shareholding Pattern
10. Dividend Policy
11. Valuations
12. Key Investment highlights
13. Risks & Concerns
www.katalystwealth.com
3. Dear Members,
Everyone wishes to own a 2-wheeler or a 4-wheeler and every 2/4 wheeler needs a battery.
Further, every battery has on an average a life span of 3 years and thus one need to change
battery in his/her automobile every 3-4 years.
Similarly, it goes for UPS and their batteries. Thus, manufacturing batteries seems like a
good and recurring business and what is most important about batteries industry is its
duopoly structure. So why not look at one of the major company that deals in Automotive
and industrial batteries.
Amara Raja Batteries (NSE Code – AMARAJABAT), in case the name sets you thinking
about this new brand in the segment of batteries apart from the well known Exide and
Amaron, it would be interesting to mention here that Amara Raja is the company behind
the well known AMARON and QUANTA brand in the segment of automotive and
industrial batteries respectively.
Yes, Amara Raja Batteries (ARBL) is the second largest battery maker in India after Exide,
and is already challenging Exide’s un-disputed leadership in the automobiles battery
segment, while commands a leadership position in the Industrial battery segment.
Before we discuss the finer details, here’s a brief snapshot:
Market capitalization – Rs 2,550 cr.
Debt free except for Interest free sales tax deferment loan
Cash and cash equivalents – Rs 230 cr.
Average cash flows from operations (post tax) for the last 5 years – Rs 141 cr.
Average Net profit for the last 5 years – Rs 142 cr.
Long standing dividend history, with the company adopting 15% annual dividend
payout policy
www.katalystwealth.com
4. Investment Snapshot (As on 31st May’12)
Recommendation – Buy
Portfolio Allocation Strategy –
1. Start with ~2% portfolio allocation in the range of 295-305.
2. Increase allocation to 4% in the range of 260-275
Profit Booking – Refer Alpha/Alpha + weekly
Current Market Price – Rs 300.65
BSE Code – 500008; NSE Code – AMARAJABAT
Bloomberg Code – AMRJ: IN
Market capitalization – Rs 2,550 cr.
Total Equity shares – 8.54 cr.
Face Value – Rs 2.00
52 Weeks High/Low – Rs 324/ Rs 179
Promoter’s holding – 52.06%
www.katalystwealth.com
5. Amara Raja Batteries Ltd – An Introduction
Amara Raja Batteries (ARBL), a JV between Galla family and Johnson Controls, U.S., is
India's second largest manufacturer in the organized VRLA (valve regulated lead acid)
batteries market, finding applications in the automotive and industrial (telecom, UPS,
railways, Solar power, etc) segments.
ARBL was set-up in 1985. The company began commercial production in 1992 and got its
first bulk order of 200 sets of batteries from the Department of Telecom (DoT) around
1993, followed by a commercial order in 1995. ARBL was the first company in India to
launch batteries based on VRLA (Valve regulated lead acid) technology and back in early
1990s DoT was its biggest client.
Realizing the need to diversify and not be dependent on the industrial segment alone for
the business, in Dec’97 the company entered into a Joint Venture Agreement with US
based Johnson Controls Inc (JCI), the world’s largest manufacturer of automotive
batteries, to manufacture automotive batteries in India with an advanced technology.
Thus, in 2000 ARBL entered the segment of Automotive batteries with the launch of
AMARON batteries based on Zero maintenance technology for the first time in India, the
key differentiator in an otherwise cluttered automotive battery market.
Since the company started business by focusing on the industrial segment, it commands a
market leadership in Telecom and UPS battery business with 45% and 32% market share
respectively.
In the Automotive battery business, Exide commands the leadership position by a wide
margin, however it is important to note here that ARBL started with the automotive
battery division in 2000-01, while Exide’s been in the business since 1950s. In the light of
the same, we like the fact that on the back of improved technology and a differentiated
distribution strategy, ARBL has been able to garner a market share of 25% in OEM and
30% in after market segment in just 12 years in the organized four-wheeler battery
business.
www.katalystwealth.com
6. Until 2007-08, the company was not providing batteries in the two-wheeler automotive
battery segment; however, since the launch of Amaron Pro Bike Ride brand in the two-
wheeler segment in May’08, the company has been able to garner a market share of 25% in
the organized replacement battery market, despite the fact that they still don’t have any
presence in the two-wheeler OEM segment.
We believe, the company's philosophy of pre-empting customer needs and its constant
endeavor to redefine products, technology with its JV partner and on its own has helped it
earn sizable market share within such a short span of time.
Further, for companies such as ARBL, distribution network plays a vital role in
aftermarket automotive batteries sales and Amara Raja has been successful in creating a
dominant network (240 franchised distributors, about 18,000 retailers, 800 exclusive retail
partners in the PowerZone format spread across semi-urban and rural locations and
around 2,000 service hubs) in the automobile battery segment in India and thus carve out
a brand equity as strong as market leader Exide Industries (EIL).
Johnson Controls Inc.
Before we proceed with other details on ARBL, it’s important to know more about Johnson
Controls Inc., being a Joint venture partner with 26% stake in ARBL.
Johnson Controls is the global leader in lead-acid automotive batteries and advanced
batteries for Start-Stop, hybrid and electric vehicles.
Company’s 50 manufacturing, recycling and distribution centers supply more than one
third of the world’s lead-acid batteries to major automakers and aftermarket retailers.
Johnson was also the first company in the world to produce lithium-ion batteries for mass-
production hybrid vehicles.
The company has over 162,000 employees worldwide and for FY 2011 it recorded more
than $40.8 billion in sales. The company is currently placed at No. 267 on Global Fortune
500 list.
www.katalystwealth.com
7. Amara Raja’s association with Johnson Controls has brought in significant competitive
advantages to the company in terms of:
Advanced technology in comparison to peers in all the spheres of lead acid
batteries.
Lead sourcing capabilities
Ability to launch new products based on advanced technologies such as lithium-ion
Business Units
ARBL has two strategic business units (SBUs):
1. The Industrial batteries division and
2. The Automotive batteries division
Prior to 2001-02, the company didn’t have any presence in the automotive space and was
thus susceptible to the vagaries of the demand in the industrial sector, primarily telecom.
Realizing the potential of automotive batteries space and the need to diversify in order to
achieve stability, ARBL roped in JCI for the manufacturing of automotive batteries.
The automotive batteries business unit commenced operations in 2001 with technology
from JCI.
Since the commencement of automotive batteries unit, ARBL has achieved stability and
consistency in growth as automotive space is relatively more stable with buoyant
aftermarket demand.
Within 11 years, the revenue mix between the two units has changed from 100:0 to
approximately 47:53 at the end of FY 11. In case the demand from the telecom space
remains subdued (discussed later) for an extended period, it is very likely that the
automotive battery division may make up for a greater proportion of the revenue mix in
the years ahead.
At the moment the approximate revenue contribution from each division is as follows:
www.katalystwealth.com
8. ARBL
Automotive Batteries Industrial Batteries
(53%) (47%)
OEM Telecom
(35%) (45%)
Replacement UPS
(65%) (38%)
Railway &
Others (17%)
As can be observed above, ARBL has fairly diversified revenue streams and not over-
dependent on any one particular sector. The same is very important because both
automotive and telecom in particular have had their share of ups and downs and thus
over-reliance on any one sector can lead to volatility in the earnings of ARBL, as was the
case till early 2000 when the company was solely dependent on industrial batteries
division.
Automotive batteries division:
Brand Equity: We believe, the automotive battery industry commands high degree of
branding power on account of being duopoly in nature with top two players’ viz. Exide
and Amara Raja controlling ~90% of the organized market. Amongst all the components in
the automobile, battery probably commands the highest degree of branding power and its
either AMARON or Exide that is preferred by both OEMs and after market customers.
Competitive Advantages for ARBL: Advanced technology and the wide distribution
network are the two major competitive advantages that have helped ARBL thwart
competition and make in-roads in an industry that was solely dominated by Exide.
www.katalystwealth.com
9. Further, now that the company has established itself as a well-known brand, it itself acts
as a sustainable moat and creates a vicious circle for the company to outgrow competition.
Sector details and market share: At Mar’11, the size of the Indian lead acid automotive
storage battery was estimated at 8,200 crores. It can further be classified into OEM &
Aftermarket, and Branded and Unbranded.
Automotive battery market Automotive battery market
(8,200 cr.) (8,200 cr.)
OEM Aftermarket Branded/Organized Unbranded
(2,050 cr.) (6,150 cr.) (4,750 cr.) (3,450 cr.)
Demand for automotive batteries is divided among different segments, with cars and
utility vehicles constituting the largest share of 36%, followed by commercial vehicles at
about 28%, 2-wheelers at about 21% and tractors at 15%.
At the OEM level, Exide and AMARON are the only two preferred brands and at the
moment there’s no scope for unorganized players. In the 4W OEM segment, ARBL
commands 25% market share, while its strong association with OEMs and wide
distribution network has reportedly helped the company penetrate replacement market
segment where it holds 30% market share in the 4W organized segment and overall 18%.
Sales to OEMs are from organized segment, while the unbranded/unorganized players,
who sell low-cost products for two-wheelers, commercial vehicles and tractors still
account for ~50% of the total sales in the aftermarket.
However, there lies a good opportunity for ARBL (as primarily focused on replacement
market) as the share of unorganized manufacturers has been in a downtrend in recent
years owing to product unreliability, rising disposable incomes, increasing quality
consciousness, environmental restrictions, and technology advancements in the
automotive industry.
www.katalystwealth.com
10. Automobile sector growth: Automotive batteries sales growth is directly proportional to
the growth in new vehicle roll-out each year. Roll-out of new vehicles in any year
contributes directly to the OEM sales in the first year, while it also adds to the replacement
demand over a recurring cycle of 3 years.
The OEM business is driven by fresh vehicle (4-wheelers and 2-wheelers) demand in any
particular year. Aftermarket sales are influenced by the number of vehicles in use, average
battery life, average vehicle age and population growth. On an average, a 4-wheeler
battery life expectancy is about three years, while 2-wheeler battery life expectancy is
around two years.
The automobile (2W + 4W) sector saw a 9% volume CAGR over five years (2005-06 to
2009-10), while 4-wheeler OEM sales grew about 13% CAGR between 2005-06 and 2009-10.
Though OEM sales have slowed down since the last 1 year on account of various micro
and macro economic factors, in the longer run the twin factors of increasing affordability
and low penetration are expected to help sustain double digit growth for the next 5 years
in India’s automobile demand.
www.katalystwealth.com
11. Yes affordability has improved several folds on account of various below mentioned
reasons and is one of the key reasons driving automobile demand in India.
Rising prosperity
Favorable demographics with a predicted increase in working-age population
Easier access to finance
Growing competition with continuously improving price-value proposition for
customers
The average salary of middle income group has increased substantially over the years
while the advancement in technology has enabled the companies provide an improved
product at a cost marginally higher that what they used to quote several years back and
thus buying 2-4 wheelers is within the reach of larger share of population in India.
Strong replacement market is another positive for battery manufacturers. Consider this, at
the end of FY 03, there were 6.7 crore registered vehicles in India while the number of
registered vehicles are expected to have crossed a mark of 13.5 crore at the end of FY 12.
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12. Since the average life span of battery ranges from 2-4 years and since the battery
replacement decision cannot be deferred, companies like Amara Raja are expected to
benefit immensely from the ever increasing number of registered vehicles on the Indian
roads.
Further, it is important to note here that replacement market has much better margins in
comparison to sales to OEMs and is relatively insulated from interest rate cycles.
As per the recent report by ICICI, they estimate overall automotive battery demand to
increase at a CAGR of ~16.4% over FY11-14E and touch ~63 million units.
The OEM demand is expected to be ~26 million units while the replacement demand has
been estimated at ~37 million units by FY14. They expect domestic auto sales to remain
structurally robust and witness ~13.5% CAGR during FY11-14E.
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13. Pricing power: Being a renowned brand in a sector dominated by only two players
controlling 90% market share, lends pricing power to the company.
Therefore, in the automotive battery space, Amara Raja is able to pass on the rise in input
costs, primarily lead, in the replacement market. With OEMs, it has a “lead pass through
agreement”. These contracts are linked to LME prices, such that a rise in cost of
production due to lead is passed on to OEMs with a lag of 3 months.
Capacity expansion: In order to stay ahead of demand and gain access to larger market
share in both OEM and replacement market, the company has been judiciously expanding
its capacity.
During FY 12, in the automotive battery space the company enhanced its 4-wheeler and 2-
wheeler battery capacities to 5.60 million units per annum (4.2 million units p.a. at the end
of FY 11) and 4.80 million units per annum (3.6 million units p.a. at the end of FY 11)
respectively.
For FY 13, the management has already guided for enhancing the capacity of 4-wheeler
batteries to 6.0 million units per annum.
www.katalystwealth.com
14. Industrial batteries division:
ARBL started with industrial battery business in 1991-92 and was the first company to
introduce VRLA battery technology in India.
Basically, the company could seal its place in the India market on account of its vastly
improved product line and still continues to dominate the market.
The company caters to the requirements of telecom, UPS back-up systems, railways, solar
power and power utility sectors. In the telecom sector, the batteries support switches and
transmission (wire line and wireless) networks; the Indian Railways use batteries in coach
air-conditioning; the batteries also support the transmission and distribution networks of
power stations. The UPS batteries support IT and ITES operations as part of UPS systems
that regulate power supply to critical equipment during voltage fluctuations.
In the telecom space, its key customers include Indus towers, Bharti Airtel, GTL, VIOM
networks, Tower vision, etc. Further, Bharti Airel has chosen to partner with ARBL as its
preferred vendor for Africa network expansion programs.
Though sales to Indian Railways constitute a small portion of the overall industrial
batteries business, ARBLs products are used in more than 40% of II and III tier air-
www.katalystwealth.com
15. conditioned coaches; they also support train lighting, and signaling and telecom (S&T)
power supply solutions (Source: Company)
In the medium VRLA segment for commercial UPS applications (BIFS sector, Government
sector, IT/ITES, etc) the company enjoys long-term supplier relationship with national
OEMs such as Emerson, Numeric, Delta, DB Power, Tritronics and Uniline.
Telecom battery business: Though ARBL continues to be the preferred vendor to all the
major telecom infrastructure and service providers, the last 2 years have been tough on the
telecom battery division with significant pressure on pricing during the last 2 quarters of
FY 11.
Since then the prices in the telecom battery space have bottomed out and the customers
are now negotiating directly with the preferred vendors as against the previously
followed norm of reverse auction mechanism, where the lowest bidder used to get the
orders. Here again ARBL is being preferred on account of its technologically advanced
product line.
As far as growth in the telecom battery space is concerned, the management is hopeful of
maintaining low double-digit volume growth against expected industry growth of 6-8%
on account of its preferred vendor status with most of the service providers and tower
companies, network expansion in Africa (comparatively much higher market share in
Africa) and impending replacement demand.
However, to account for any unforeseen slowdown, the company has been working on
ways to make Large VRLA capacity more flexible so that it can cater to segments other
than telecom and thus maximize capacity utilization.
UPS battery business: Despite slowdown in telecom battery business, ARBL has been able
to sustain ~15-20% volume growth in industrial battery division on account of robust
demand for UPS batteries.
www.katalystwealth.com
16. Plagued by the perennial problem of power deficit, power backup market in India is
growing at an annual rate of 15-20% varying within the four different segments namely
generators, UPS, inverters and batteries.
Extensive computerization of banking and government departments, robust growth of
IT/ITES sector in India, rapidly expanding ATM network and persistent power shortage is
expected to help sustain 15% annualized growth for UPS batteries during the next five
years.
In UPS battery business, ARBL has been able to build a brand out of its “QUANTA”
batteries and thus leads Medium VRLA (for commercial UPS applications) product
segment with ~32% market share. The demand for company’s batteries has been very
robust and therefore ARBL has been consistently achieving 90-95% capacity utilization on
expanding capacity base.
As per the management, more than 30% of the current market requirement is still met by
imports from China and South East Asian countries; however their share is rapidly
declining on account of inferior quality and lack of after sales service.
Thus, besides a gradual expansion in market size, declining share of unorganized players
lends forward a huge opportunity for companies such as ARBL to consistently grow at 18-
20% and outpace industry growth rate.
www.katalystwealth.com
17. Brand building
Advertizing Commission Sales Total Sales & Net Revenue Adv. & Sales
cost (cr.) on Sales (cr.) Expenses (cr.) Advertizing (cr.) cost as % of
Expense (cr.) revenue
FY 01 0.16 1.03 1.98 3.17 125.93 2.52%
FY 02 0.03 0.77 2.66 3.46 151.85 2.28%
FY 03 0.91 0.83 3.09 4.83 160.73 3.01%
FY 04 9.98 0.83 4.37 15.18 163.64 9.28%
FY 05 7.11 0.78 3.53 11.42 219.98 5.19%
FY 06 10.04 0.96 4.40 15.40 363.25 4.24%
FY 07 10.04 1.42 8.24 19.7 596.38 3.30%
FY 08 18.50 2.00 12.40 32.9 1085.33 3.03%
FY 09 17.83 2.35 19.84 40.02 1315.18 3.04%
FY 10 13.55 3.66 18.31 35.52 1466.63 2.42%
FY 11 10.29 2.65 20.07 33.01 1763.38 1.87%
As can be observed above, till 2003 the company wasn’t spending much on brand building
and advertisements, given the fact that it was primarily into B2B operations.
However, as the share of automotive battery business gained traction, the company
increased its expense on advertizing 10 fold from 0.91 crore to 10 crores.
ARBL derives 65% of its automotive batteries sales from replacement market and in the
replacement market the demand for batteries is to a certain extent driven by brand
building and thereby advertizing.
ARBL didn’t build its brand on the basis of advertizing alone, however it played a
significant role in creating space for AMARON in the minds of customers. The other
important factors being:
Setting up wide distribution network – A wide distribution network creates easy
accessibility and serviceability of the product.
Vendor association with all the major OEMs – Any automobile is factory fitted with a
battery and thus when a customer replaces a battery after 2-3 years; the performance of the
original battery plays a key role in decision making.
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18. An important point to be noticed from the above illustration is that ARBL spent around
50% more on advertizing and sales in FY 11 that it did in FY 07. However, during the same
period the turnover of the company has improved by 200% with increasing contribution
from automobile battery business.
Well this is how it is with good brands; beyond a certain point they create a positive
feedback look without company having to do much on enhancing the brand equity.
Performance Snapshot
Particulars (In cr.) 2012 2011 2010 2009 2008 2007 2006
Net Sales 2371.03 1763.38 1466.63 1315.18 1085.33 596.38 363.25
Operating Profit 357.66 259.7 289.48 169.25 179.17 83.15 47.6
Operating Profit 15.08% 14.73% 19.74% 12.87% 16.51% 13.94% 13.10%
Margin (%)
Interest 4.05 2.39 7.92 20.1 14.43 4.73 2.83
Depreciation 46.47 41.71 42.94 34.56 24.45 17 14.7
Profit Before Tax 318.64 220.38 254.61 122.65 145.93 71.19 37.32
Tax 103.58 72.28 87.58 42.17 51.57 24.15 13.48
Profit After Tax 215.06 148.09 167.03 80.48 94.36 47.04 23.84
Profit After Tax 9.07% 8.40% 11.38% 6.12% 8.69% 7.89% 6.56%
Margin (%)
Cash from Opt. NA 85.51 214.25 236.36 -17.09 -36.56 26.64
Return on Equity 29.27% 24.89% 35.19% 21.79% 32.72% 21.14% 12.48%
As can be observed from the above illustration, the company’s performance has been very
good over the years and consistently delivered return on equity in excess of 20% without
employing excessive leverage. Ignoring the small base of FY 06, the company has still been
able to grow at 23% on annualized basis during the last 4 years and it is important to note
here that during the same period both automotive and telecom industry witnessed
extreme lows and highs.
Besides, the company achieved the above performance on the back of consistent yet
effective capacity expansion, while de-leveraging its balance sheet. Even during FY 12, the
company enhanced its 4-wheeler and 2-wheeler battery capacities to 5.60 million units per
www.katalystwealth.com
19. annum (4.2 million units p.a. at the end of FY 11) and 4.80 million units per annum (3.6
million units p.a. at the end of FY 11) respectively. For FY 13, the management has
indicated enhancing the capacity of 4-wheeler batteries to 6.0 million units per annum.
Despite the above expansion, as at 31st Mar’12, the company continues to be debt free
with cash and cash equivalents in excess of Rs 230 crores.
As far as accounting policy of the company is concerned, for FY 2009 the company
recorded drop in profits owing to Rs. 32.2 crore provisioning towards cash and notional
forex loss on account of sudden depreciation in rupee. It is important to note here that
instead of resorting to lenient provisioning allowed under AS 11, the company adopted a
conservative approach of charging the entire forex loss in the same year.
Regarding margins, the management expects to sustain operating margins in the range of
15-16%, barring any unforeseen slump in demand. The company recorded ~20% operating
margin in FY 10, however in that year company benefitted from extremely low average
price for lead, one of the key raw materials, as a fallout of global economic crisis in 2008-
09.
Operating efficiency
Net Sales Avg. Capital Avg. Capital Sales to Debt * Debt
(cr.) Employed Working Turnover Working Equity Equity ratio
(cr.) Capital (cr.) Capital ratio
FY 06 363.25 222.97 105.01 1.63 3.46 0.20 0.09
FY 07 596.38 313.14 165.74 1.90 3.60 0.58 0.44
FY 08 1085.33 516.92 307.15 2.10 3.53 0.95 0.81
FY 09 1315.18 670.45 368.62 1.96 3.57 0.70 0.56
FY 10 1466.63 663.24 326.85 2.21 4.49 0.17 0.05
FY 11 1763.38 689.95 352.35 2.56 5.00 0.15 0.04
FY 12 2371.03 824.22 449.04 2.88 5.28 0.10 0.01
* - On excluding interest free sales tax deferment loan
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20. As can be noticed from the above table, the good point about ARBL’s performance has
been an overall improvement in operating and capital allocation efficiency.
With every passing year the company has been generating more revenue for every single
rupee employed in the business.
Similarly, there’s been a concerted effort by the management to optimize working capital
requirement of the company as they adopted a policy of ‘Cash and Carry’ system of sales
in the automotive aftermarket. The impact is already evident with a gradual improvement
in Sales to working capital ratio from 3.46 in FY 06 to 5.28 in FY 12.
Further, since the company has been generating good cash flows from operations, they
have been able to repay all the debts while still carry out requisite expansion every year.
Capacity and Sales expansion
ARBL’s management, led by Mr. Jayadev Galla, business prowess has resulted in
significant capacity and sales expansion in both industrial and automotive batteries
segment over the years.
Particulars 2011 2010 2009 2008 2007 2006 2005
Installed Capacity (in no.) 10070000 9300000 8800000 5850000 4300000 2900000 1775000
Avg. Installed Capacity (in no.) 9505873 8162000 6535000 4900000 3400000 2600000 NA
Production (in no.) 8188533 6424560 5070387 4194960 3116954 2129491 1230974
Sales (in no.) 8077061 6475396 5029394 4121017 3083573 2117664 1222943
Gross Sales (in cr.) 2076.48 1691.08 1583.95 1349.98 745.10 445.82 268.54
The management’s focus on establishing itself as a premium and technologically advanced
brand is reaping returns as there’s been an increasing trend of shift from unbranded to
branded products and ARBL has been successful in capturing a larger share of the
unorganized market, while still holding its premium pricing and thereby margins.
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21. Since unorganized segment still constitutes a large share of automotive aftermarket and
UPS batteries segment, we believe the above trend will continue for next many foreseeable
years.
Management and Shareholding Pattern
Mar’12 Dec’11 Sep’11 Jun’11 Mar’11
Promoter and 52.06% 52.06% 52.06% 52.06% 52.06%
Promoter Group
India 20.54% 20.54% 20.54% 20.54% 20.54%
Foreign 31.52% 31.52% 31.52% 31.52% 31.52%
Public 47.94% 47.94% 47.94% 47.94% 47.94%
Institutions 25.87% 25.93% 26.01% 25.59% 24.36%
FII 6.22% 6.32% 4.28% 3.45% 2.44%
DII 19.65% 19.61% 21.73% 22.14% 21.92%
Non-Institutions 22.07% 22.01% 21.93% 22.35% 23.58%
Bodies Corporate 2.70% 2.95% 2.83% 2.61% 2.88%
Custodians
Total 85,406,250 85,406,250 85,406,250 85,406,250 85,406,250
Out of a total Promoter’s stake of 52%, both Galla family and Johnson Controls hold 26%
each.
Johnson Controls has been one of the most important factors behind ARBL’s resounding
success during the last 10 years as it has helped the company launch technologically
advanced products in the automobiles battery market.
We believe Johnson’s 26% stake in the company is significant from various view points:
First, 26% is a significant stake and thus aligns their interest with the interests of the
company.
Access to advanced technology
Better Corporate Governance standards – In the past JCI has been named as one of
the world’s most ethical company, while it was also ranked #1 in Corporate
Responsibility Magazine’s “100 Best Corporate Citizens” list.
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22. Dividend Policy
The company has been consistently paying dividends. Further, since 2010 the company
has adopted a policy of distributing up to 15% of the profit after tax (PAT) to shareholders.
We believe 15% payout is very reasonable as the company has been able to maintain a
healthy mix of debt and equity and consistently delivered return on equity in excess of
20%.
Valuations
ARBL has 8.54 crore shares outstanding. At the current stock price of Rs 300 per share, the
stock is quoting at a market cap of Rs 2550 crores, i.e. 12 times trailing twelve months’
earnings of Rs 215 crores.
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23. The company is debt free (78 crore outstanding interest-free sales tax deferment loan is a
financial incentive by the state of Andhra Pradesh for setting up industry in a backward
area. The sales tax collected by the Company in a particular year needs to be paid to the
government after 14 years) with cash holdings in excess of Rs 230 crores.
We believe that current valuations are attractive and do not capture expected future
growth in earnings.
Amaron, Power Zone and Quanta are all major brands in the automotive and industrial
battery segments. Further, on the back of advanced technology and the differentiated
distribution strategy the company has been able to convert the industry from Exide’s
monopoly to ARBL and Exide’s duopoly in just 10 years, which speaks volumes of the
management’s execution ability.
In the long run, the growth outlook for the battery segment is very bright and ARBL has
been consistently expanding its capacity and its distribution network in order to sustain
the growth momentum.
Key investment highlights
The Indian battery industry commands a certain branding power on account of being
duopoly in nature with top players’ viz. Exide and Amara Raja controlling ~90% of the
organized market. As we see it, amongst all the components in the automobile, battery
probably commands the highest degree of branding power.
Further, companies like Amara Raja and Exide are able to pass on the rise in input costs,
primarily lead, in the replacement market. With OEMs, they have a “lead pass through
agreements”. These contracts are linked to LME prices, such that a rise in cost of
production due to lead is passed on to OEMs, though with a certain degree of lag.
Strong replacement market is another positive for battery manufacturers. At the end of FY
03, there were 6.7 crore registered vehicles in India while the number of registered vehicles
are expected to have crossed a mark of 13.5 crore at the end of FY 12. Since the average life
span of battery ranges from 2-4 years and since the battery replacement decision cannot be
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24. deferred, companies like Amara Raja are expected to benefit immensely from the ever
increasing number of registered vehicles on the Indian roads.
Even though automobile industry witnessed muted growth in FY 12, over the longer term
the industry is expected to maintain the growth rate of ~13-15%. Besides, in the
automotive battery business, the unorganized segment still accounts for ~45% market
share, however it’s steadily declining in favor of organized segment and thus there lies a
good opportunity for ARBL.
Similarly in the industrial batteries division, UPS battery segment is expected to grow at
14-15% on annualized basis and there’s a fairly large unorganized segment.
What is best about ARBL is its constant search for better technology and these days’
customers are willing to shell extra money in the name of advanced technology
Risks & Concerns
For FY 11, ARBL derived ~20% of its revenue from Telecom sector. Off-late ARBL’s been
witnessing pricing pressure on telecom batteries as the telecom industry is facing a lot of
headwinds and the companies are resorting to cost cutting measures such as sharing of
towers, thus bringing down the expansion of telecom infrastructure. However, company
has still been able to manage low double digit volume growth on account of good order
flow from Airtel’s expansion in Africa and since the company enjoys the “Preferred
supplier status”.
Lead accounts for ~85% of the total raw material cost of the company and the prices of
lead have been very volatile in the past. Though ARBL enjoys “lead pass through
agreements” with OEMs, there’s a certain degree of delay before the company is able to
pass on the hike to the customers and thus in a year with a sharp increase in prices of lead,
the margins of the company can come under pressure.
Lastly, Mr. Jayadev Galla, the Managing Director of ARBL evinced interest in joining
politics and this is a much bigger area of concern.
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