Amara Raja Batteries earnings for Q1FY21 showed the impact of Covid. It reported a 56% (YoY) drop in consolidated net profit at Rs.63 crore on a revenue of Rs.1151 crore, down 36%.
The performance of the company during the quarter comes against the backdrop of severe disruptions in manufacturing, supply chain, and sales and distribution operations due to COVID-19 lockdown.
In the automotive segment, OEM demand was subdued due to lockdown challenges across the country and vehicle production could recommence only in June with graded ramp up. On the other hand, there was good demand in auto replacement segment. The company responded to the needs of customer segments such as Telecom and UPS to ensure uninterrupted supply of products and services under essential category to support the critical communication networks and data centers across the country. Exports faced major challenges in the quarter. Markets in many countries were either impacted by lockdowns or disruption in logistics.
The market is looking ahead of these earnings as it feels that the road ahead will not be tough as Q1 because the auto sector has bounced back. That explains why the stock opened a tad lower at Rs.717 v/s Friday’s close of Rs.717.85 and jumped up to an intraday high at Rs.737. It is currently trading at Rs.730 levels