Fundamental Analysis of Amaraja Battaries

2 INDUSTRY PROFILE

IntroductionA battery is an electrochemical device in which the free energy of a chemical reaction is converted into the electrical energy. The chemical energy contained in the active materials is converted into electrical energy be means of electrochemical oxidation-reduction reaction.How a Battery Works?

When you place the key in your Car's ignition and turn the ignition switch to "ON" a signal is sent to the car's battery. Upon receiving this signal the car battery takes energy that it has been strong in chemical form and releases it as electricity. This electric power is used to crank the engine. The battery also releases energy to power the car's lights and other accessories.

It is the only device, which can store electrical energy in the form of chemical energy, and hence it is called as a storage battery.

Sealed Maintenance free (SMF) Batteries

Sealed Maintenance Free (SMF) batteries technologies are leading the battery industry in the recent year in automobile and industrial sector around the globe.

SMF batteries come under the rechargeable battery category so is can be use a number of time in the life of a battery. SMF batteries are more economical than nickel cadmium batteries. These batteries are more compact than the west type batteries. It can be use at any position; these batteries are very popular for portable power requirements and space constraint applications.Value Regulated Lead Acid (VRLA) Batteries

VRLA batteries are leak proof, spill-proof and explosion-restraint and having life duration of 15-20 years. These batteries withstand the environmental conditions due to high technology, in built in the batteries. Each cell is housed in a power coated steel tray making them convenient to transport and installation. So transit damages are minimized in case of these batteries.Sealed Maintenance Free (SMF) batteries and Value Regulated Lead Acid (VRLA) batteries technology are leading the battery industry in the recent years in automobile and industrial battery sector around the globe VRLS batteries have become the preferred choice in various applications such as uninterrupted power supply, emergency lights, security systems and weighing scales.Classification of BatteriesBatteries are broadly classified into two segments like,

Automotive BatteriesIndustrial Batteries

Automotive Batteries

Apart from mopeds all other automobiles including scooters need storage battery. So Automotive batteries are playing Pre-dominant role in automobile sector by influencing customers in the automobile market. Automobile batteries can be further distinguished as the original equipment (OE) markets as low as 5-6%. OE segment has the advantage of securing continuous order and inquiries. This enables manufactures to streamline production facilities, plan production schedules and attain certain level of operational efficiency.

The replacement market, on the other hand, is much larger. The replacement market is characterized by the presence of large unorganized sector, which constitutes around 55-60% of the total replacement market. This is possible due to low capital entry barrier. These players have the advantage of inapplicability duties.Industrial Batteries:

The industrial Battery segment comprises of two main categories. One comprises of the "Stationery Segment" and the second relating to "Motive power and Electric Vehicles". The Motive Power and the Electric Vehicle segment comprising of "Telecom, Railways and Power Industries have registered a growth in excess of 20% and this trend is likely to continue in the next 5 years.The Industrial Segment is highly technological intensive and access to high quality world-class technology is an important factor and is vital for brand reference. The total demand for the industrial battery segment is met by indigenous production with small saves of about 10% by imports. The demand for industrial batteries has grown slowly and steadily.All for as industrial batteries are concerned the evolving consciousness among Corporate and Government departments regarding environment factors will result in a shift towards pollution-free technology. There has been a preferential shift in this segment from the Conventional Lead batteries to sealed maintenance-free batteries (SMF). The bull of battery industry admits that the sales are fallen but at the same time they are expecting larger orders especially from telecom industry, which gets time they are expecting larger orders especially from telecom industry, which gets going. Due to strong customers like telecom, railways and electricity boards, the industrial batteries are on prosperous scale.Recycling BatteriesBattery acid is recycled by neutralizing it into water of converting it to sodium Sulphate for laundry detergent, glass and textile manufacturing.

Cleaning the battery cases, meeting the plastic and reforming it into uniform pellets recycle plastic. Lead, which makes up 50% of every battery, is method, poured into slabs and purified.

The following are the major manufacturers in battery industry in India,

Exide Industries Standard Batteries Amco Batteries Tudor India Amara Raja Batteries Ltd. Hyderabad Batteries Ltd.

Sealed Maintenance Free (SMF) batteries and Value Regulated Lead Acid (VRLA) technologies are leading the battery industry in the recent years in the preferred choice in various applications such as uninterrupted power supply, emergency lights, and Security systems and weighing scales.

Characteristics of VRLA batteries

DMF batteries are comes under the rechargeable battery category so it can used a number of times in the life of battery. SMF batteries are more economical than nickel cadmium batteries. These batteries are more compact than the wet type batteries. It can be used at any position: these batteries are very popular for portable power requirements and space constraint applications.VRLA batteries are leak proof, spill-proof and explosion resistant and having life duration of 15-20 years. These batteries withstand the environmental conditions due to high technology in built in the batteries.Each cell is housed in a power coated steel tray making them convenient to transportation and installation, so transit damages are minimized in the case of the batteries.Prospects of SMF / VRLA batteries in IndiaThe following factors are influencing the demand for VRLA technology batteries. Entry to multinational in Telecom industry. DOT's policy decisions to upgrade the overall technology base.constraints in the use of conventional battery in radio paging and cellular segmen Due to project expansion in Telecom & Railways, the demands for VRLA batteries are greater than other industrial batteries.TELECOMThe Government's policy to increase the capacity from 10 million to 21 million lines by 2000 increased the demand for storage batteries considerably the vale added services like radio paging and cellular will increase the demand for storage batteries in future considerably.RAILWAYSIn Railways, the demand estimate is based on the annual coach production this comes to 2500 numbers by Railways itself and 1000 numbers more by various other segments, replacement demand and annual requirement for railways electrification.

POWER SECTORSIn this sector, the estimated 90 private power projects which are expected to produce 40,000 MV with an approximate capital outlay of RS. 1,40,000crores would keep the industry's future brighter in the coming years.The demand of VRLA batteries is increasing due to its performance over conventional batteries. So it is more acceptable to consumers. There appears to be a considerable potential for electrically operated material handing equipment and related vehicle besides the privatization of technology. It is expected to generate wider market for sophisticated batteries. The Railways will continue to generate demand for various applications. The power sector is also opening up a setting up pf generating stations will give a boost to demand levels. The demand is OEM segments will grow time with the growing automation in industries.The domestic storage battery industry is in the process of transcending the past limitations in the technology front and the new sophisticated battery will be introduced infuture threat from the overseas supplies do not at the current moment appeal to be significant.STORAGE BATTERIESIn the storage battery industry, some new units have come up. The latest development in this field is maintenance free rechargeable storage battery. These are also known as Value Regulated Lead Acid (VRLA) or Sealed Maintenance Free (SMF) batteries. Improvement of technology in this industry is benefiting customers.

1.3 COMPANY PROFILEAmara Raja Batteries Limited (ARBL) incorporated under the company's act, 1956 in 13th February 1985, and converted in to public Limited Company on 6th September 1990.The Chairman and Managing Director of the Company is "Sri GallaRamachandra Naidu". ARBL is the first company is India which manufactures Value Regulated Lead Acid (VRLA) Batteries. The main objective of the company is manufacturing of good quality of "Sealed Maintenance Free" (SMF) acid batteries. The company is setting up to Rs. 1,920 lakhs plant is in 185 acres in Karakambadi village, ReniguntaMandal. The project site is notified under "B" category.The company has the clear-cut policy of direct selling without any Intermediate. So they have set up six branches and are operated by corporate operations office located in Chenai. The company has virtual monopoly in higher A.H. (Amp Hour) rating Market its product VRLA. It is also having the facility for industrial and automotive batteries.Amara Raja is 5 'S' Company and its aim is to improve the work place environment by using 5 'S' technique which is :A Systematic and rational approach to work place organization and methodical house keeping with a sense of purpose, consisting of the following five elements.1.SEIRI-Sort Out-Segregate necessary from unnecessary.-Discard what is not required.-Decide on frequency of sorting.2.SEITION -Systematic arrangement-Arranging in order-A place for everything and everything in its place

3.SEISO-Spic and Spam-Cleaning the work place / Equipment -Ensuring Tip Top Condition4.SEIKETSU -Standardization-Working Methodology (Procedures and work Instructions)

5.SHITSUKE -Self Discipline-Forming the habit -Be disciplinedThey propose to accomplish this by - Training the people and creating awareness on 5 'S' - Motivating and changing the behavior patterns of the people. - Establishing standard / procedures for the implementation of each element of 5S. They believe that effective implementation of 5 'S' techniques will result in Consistent and better quality product. Higher productivity Lesser Accidents Higher Employee MoraleCOLLABORATORSAmara Raja Batteries limited was a strategic tie up with "Johnson Controls Inc." of U.S.A. who owns 26% stack in this company. It is the larges manufactures of lead acid batteries in North America.The main objective of the company is manufacturing of good quality of "sealed Maintenance Free acid batteries (SMF). The annual growth rate of a company is 2.5% per annum. The present turnover of the company is Rs.270 Crores. Major customers are BSNL, VSNL, SIEMENS, and BHEL etc.Amara Raja has always offered time tested world class Technology and Process developed on international standards. High integrity VRLA systems like power stack and power plus or the recently launched high performance UPS Battery - KOMBAT and AMARON hi-life automotive batteries are the products of the collaborative battery efforts of engineering at Johnson controls Inc. and Amara Raja. AMARON launched in January 2000, Amara Raja has pioneered the introduction of hi-cube automotive batteries in India. This zero maintenance product uses the revolutionary patended silver X technology developed by Johnson controls for high environments and Incorporates may superior features that make it the most advantage battery on roads any where in the world.STRENGTHS Proven technology from GNB and being a pioneer. Strong and well organized customer base Full - organized infrastructure in place Manufacturing facilities perceived as a benchmark in India Complete range of VRLA batteries. Proven field performance in all user segments. Approved vendor status in major user segmentsMISSION STATEMENT OF AMARA RAJA

"To transfer our spheres of influences and to enrich the quantity of life by building institutions that provides better access to better opportunities, goods and services. To more people 'All the time'".

VALUES & BELIEFS

We believe in treating each other with honesty, fairness, dignity and respect and in creating a safe, healthy and pleasant workplace.

We believe that the empowerment of our people is the foundation of our strength. We will help each other to work in teams and hold each other accountable to fair contribution in achieving our collective goals.

We believe in innovative and optimum use of our continuousimprovement everything we do, as they are pre-requisites for sustained growth.

We will strive to exceed our customer's ever increasing expectations through continuous improvement in quality, service support and time compression.SOCIAL PROGRAMS

Housing colony for employees in progress. Total plan, 500 families over five years. Plan to provide community hall, open auditorium, parks and play ground. Training center for employees. Bachelor's hostel, co-operative stores banks in operation. Roads, water supply, streetlights, greenery educational villages. Awards and rewards to the younger generation for improvement of education. Modernisation of public parks for the fledged recreation ofchildren. Public awareness programs (in Mumbai) on environmentalprotection, through street theatre "whose Mumbai is it any way" on the occasion of Earth day April 22nd 2001BRANDAmara Raja's reflects the innate dynamism of the company. The emblem demonstrates the interplay of the universal Y in Yang symbols and the philosophy of balanced forces. The colours green and black emphasize the perfect symmetry of absorbing and releasing energies, while the entire form in continuous motion signifies unrelenting progress. The colour green also elucidates the role of technology as an integral part of the company's growth. Not incidentally, it also connotes the company's resolve to preserve and nurture the environment.CULTURE AND ENVIRONMENT

Amara Raja is putting a number of HRD initiatives to foster a spirit of togetherness and a culture of meritocracy. Involving employees at all levels in building organizational support plans and in evolving our vision for the organization.

ARBL encourage initiative and growth of young talent allows the organization to develop innovative solution and ideas. Benchmark pollution control measures, energy conversation measures, waste reduction schemes, massive green belt development programs, employee health monitoring and industrial safety programs have helped ARBL to take further environment management program. Amara Raja had now targeted to secure the ISO 14001certification.

QUALITY POLICY

ARBL's main aim is to achieve customer satisfaction through the collective commitment of employees in design; manufacture and marketing of reliable power systems, batteries, allied products and services.To accomplish above, ARBL focus on Establishing superior specifications for our products and processes. Employing state-of-the-art technologies and robust design principles. Striving for continuous improvements in process and product quality. Implementing methods and techniques to monitor quality levels. Providing prompt after sales service.

RESEARCH & DEVELOPMENTSpecific areas in which the company carries out R & D are, New product development. process technology up gradation. Application engineering for new market place. Quality improvements.

Benefits derived as a result of above R & D

Developed 4v / 200 AH batteries. Design optimization of higher AH batteries for DOT application. Design optimization of batteries 92v / 1285 for TL / AC - Railway application Formation cycle optimization results in reduced duration and rejection. Chemist curing cycle optimization. Manufacture of automobile batten' for four - wheeler vehicles.FUTURE PLAN OF ACTION Commercialization of motor - cycle batteries. Development of new range high integrity VRLA cell design. Establishment of product for new application segment. Studies on paste additives to enhance the battery performance. In-depth evaluation of metal surface treatment chemicals to reduce the process cycle time. Validating alternative grades of propylene to conserve energy and to improve productivity.AWARDS

Honorable Doctorate Degree 2008 by S.V.University, Tirupati and JNTU, Hyderabad. "The Spirit of Excellence" Awarded by academy of fine arts, Tirupati. "Best Entrepreneur of the year 1998" by Hyderabad Management Association. "Industrial Economist Business Excellence Award - 1991" Awarded by the Industrial Economist, Chennai. "Excellence Award" by institution of Economic Studies (ES), New Delhi. "Udyog Rattan Award" by institution of economic studies, New Delhi. "Q1 CERTIFICATE" - 2002 by FORD Company.AMARA RAJA GROUP OF COMOANIES AMARA RAJA POWER SYSTEMS PRIVATE Ltd. (ARPSL), Karakambadi, Tirupati, MANGAL PRECISION PRODUCTS PRIVATE Ltd1. (MRPL1), Karakambadi, Tirupati. MANGAL PRECISION PRODUCTS PRIVATE Ltd2. (MPPL2),Petamitta, Chittoor. AMARA RAJA ELECTRONICS PRIVATE LIMITED (AREPL),Dighavamgham, Chittoor. GALLA FOODS PRIVATE LIMITED (GFPL), PuthalapattuMandal, Chittoor.

GENERAL INFORMATION

AMARA RAJA BATTERIES LIMITED

Amara Raja Batteries Limited wad established in 13th, February 1985 and the converted into public limited company in the year 1990. Amara Raja has a strategic tie-up with Johnson Controls Inc. of the U.S.A.Amara Raja has demonstrated its commitment to offer optimum system solution of the highest quality and has become the largest supplier of Indian utilities such as the India Railways, Department of Telecommunications, Electricity Board and major power generation companies.

ARBL comprises of two major division viz., Industrial Battery Division and Automotive Battery division. The total strength of ARBL is around 1350.

ARBL

Industrial Battery Division Auto Battery Division Railway Coaches Telecom UPS

INDUSTRIAL BATTERY DIVISION (IBD)Amara Raja has become the benchmark in manufacturer of Industrial batteries. India is one of the largest and fastest growth markets for industrial batteries in the world. Amara Raja is leading in the front, with an 80% market share is stand by VRLA batteries point of view. It is also having the facility for production plastic components.ARBL is the first company in India to manufacture VRLA (SMF) Batteries. The initial investment of the company has Rs.1920 lakhs, the total land is around 18 acres in Karakambadi village, ReniguntaMandal. The project site is notified under 'B' category.CapacityThe capacity per the year 2005 - 2006 of IBD is 3, 70,000 cells per annum.ProductsAmara Raja being the first entrant in this industry and has the privilege of pioneering VRLA technology in India. Amara Raja has established itself as a reliable supplier of high quality products to major segments like Telecom, Railways and power.Competitors

The major competitors for Amara Raja Batteries are "Exide Industries Ltd., and GNB"

AUTOMOTIVE BATTERY DIVISION (ABD)

ARBL has inaugurated its new automotive plant at karakambadi in Tirupati on September 24th, 2001. This plan is a part of the most completely integrated battery manufacturing facility in India with all critical components, including plastics sourced in-house form existing facilities on site. In this project, Amara Raja's strategic alliance partners Johnson Control Inc., of USA have closely worked with their Indian counterparts to put together the latest advances in manufacturing technology and plant engineering. It is also having the facility for producing plastic components required for automotive batteries.Capacity

With an existing production capacity of 5 lakh units of automotive batteries, the new Greenfield plant will now be able to produce 1 million batteries per annum. This is the first phase in the enhancement of Amara Raja's production capacity, for this the company has invested Rs.45 crores and the next phase, at an additional cost of Rs.25 crores, for the production capacity will be increase to 2 million units and the company has estimated to complete around 3 years, after that ARBL will become the single larges battery manufacturer in Asia. The Fiscal Year 2005 - 2006's capacity of ABD is 2.2 million number per year.ProductsThe products of ABD are AMARON Hi-way AMARON Harvest AMARON Shield AMARON Highlife

CustomersARBL has prestigious OEM (Original Equipment Manufacture) clients like FORD, GENERAL MOTORS, DAEWOO MOTORS, MERCEDES BENZ, DAILMLER CHRYSLER, MARUTI UDYOG Ltd., Premier Auto Ltd., and recent acquired a preference supplier alliance with ASHOK LELYLAND, HIDUSTAN MOTORS, TELCO, MAHINDRA & MAHINDRA and SWARAJ MAZDA.

CompetitorsEXIDE, PRESTOLITE, and AMCO.FEATURES AND BENEFITS OF THE PRODUCTAbsorbed ElectrolyteSafe, no fee acidSealed ConstructionSpell proof and leakOxygen recombination cycle No external gassingResealing safety valueExplosion proof and pressure regulatedCopper core terminalImproved connectionSpecial hybrid alloyDeep cycle capabilityFactory chargedReady to useAUTOMOTIVE BATTERY DIVISION (ABD)1.OEM (Original Equipment Manufacturing) Eicher India Ltd., Eicher Motors Ltd., Fiat India Limited Ashok Leyland Limited Honda Siel cars India Limited Ford India Limited Daimler Chrystler private Limited Tata Motors Limited Hindustan Motors Limited General Motors Private Limited Mahindra & Mahindra Hyundai Motor India Limited MarutiUdyog Limited International Tractors Limited2.PRIVATE LABELS Lucas Indian Service Limited AC Delco MICO BOSCH

3.EXPORTS BOSCH, Japan Fiamma, Italy Pollux Distribution Inc., Philippines Cars Traders, Dubai NW Batterien Trading Enterprise, Singapore Namwah Battery Co. (Pvt) Limited, Singapore G.J.Roussakis, S.A.Greece David Pieris Motor Company Limited, Srilanka Silvertlec Company Limited, Taiwan Shanghai Bolder Automobiles Components Company M/S Dephi Diesel System. U.K. M/S Abdullah M. Bahby Son's Co., Saudi Arabia M/S Fatima Trading Co., Kuwait Dugar Brothers, Nepal Suzuki Motor Corporation, Japan Hyundai East Africa Limited, Tanzania M/S Ryde Batteries P/L, AustraliaAMARA RAJA POWER SYSTEMS PRIVATE LIMITED (ARPSPL) Amara Raja Power Systems Private Limited was incorporated in 1984 and was co-promoted by Andhra Pradesh Electronic Development Corporation (APDEC). By virtues of APEDC's equity participation ARPSL has become a deemed public limited company as per section 43(A) of the Companies Act and ARPS(P)L has engaged in the manufacture of uninterrupted power systems (UPS), Battery Charges (BC) and Inverters. The Company had a technical collaboration with "HOR" Power System Inc. of USA. The operation of the firm is highly satisfactory and the present credit rating of the company is "A".Products:The products of Amara Raja Power Systems Private Limited (ARPSPL) are Conventional charges Switch Mode Rectifiers (SMR) Integrated Power Supply systems (IPS)MANGAL PRECESSION PRODUCTS PRIVATE LIMITED 1 (MPPL1)MPPL1 was stated in the year (1996 - 1997) to produce battery components like "Copper Connectors, Copper Inserts, Hardware required by ARBL and ARPSL".It is having all the "sheet metal processing machinery", it stats form "sheet cutting to final painting with punching, bending, welding, phosphate and power coating processes".The plant is locating at KarakambadiVillage, ReniguntaMandal, Tirupati and is registered as an ancillary unit to ARBL and ARPSL. The operations of the company are brisk and satisfactory.MANGAL PRECESSION PRODUCTS PRIVATE LIMITED 2 (MPPL2)MPPL2 was started in the year (1996 - 1997) to produce batten-components like "copper inserts, hardware required by ARBL and ARPSL".The unit located at PetamittaVillage, TalapulapalliMandal, Chittoor and at a distance of 65kms from Amara Raja group of companies, Karakambadi, Tirupati.In this the aim is to develop backward villages. It will also produce quality hardware for "Automobile Manufacturer Company" up near Chennai.AMARA RAJA ELECTRONICS (Pvt.) LIMITEDIt was recently established in 2000. It produce electronic card and power distribution broads for UPS and inverters.

Product ProfileType of VRLA batteries manufactured in the Industrial Battery Division and their application are as follows:

1.POWER STACKApplications: Power plants, process and service industry, Railways, Telecommunications, Uninterruptible Power Supply (UPS) systems, Electronic Private Automatic Branch Exchange (EPABX), Defence (Onshore & Offshore Wireless communication cellular Radios), Motive Power.2.KOMBAT (UPS BATTERY)Applications: UPS, EPBX, Engine Starting, Emergency lighting, SPV, Portable Power, Security Systems.3.BRUTEApplications: Forklifts, Pallet trucks, Stackers, 8 Platform trucks

PRODUCTION FACILITIESDuring the year under review ARBL had Prioritised and directed its objectives towards streamlining the production process by assimilating and synchronizing capacities of different section of plant to optimize the capacity utilization. As a part of this programme, ARBL has proposed to increase the capacity of assembly and formation section. The reasons for the capacity are as follows :Expansion in as under To meet the growing demand for the power stack batteries. To cope - up with the peak level operations during the second half of the fiscal year. To improve the overall Productivity and Quality. To balance the "line capacity" of the plant with essential utilities and facilities.

To achieve the above, ARBL had conducted an elaborate study on the capacities of different sections and identified the section wide requirements. This had clearly spelt out the need for capacity expansion in Power Stack assembly line formation section, on completion of the expansion programme the capacity will increase from 100,000 to 160,000 batteries per annum.

Decisions direct influence on inventory:

PRODUCT PROFILES.NoPRODUCT NAMEFEATURESAPPLICATIONS

1AMARON HARVESTHigh performance, Totally maintenance free, High power charge acceptanceFor Tractors

2AMARON SHIELDReady to fit, long life low maintenance Higher cranking powerFor Inverters

3AMARON HI-LIFE BATTERIESLong life maintenance free, Fully scaled and tested No leakage/improved safetyCars, Utility Vehicles, Tractors, 4Wheelers, HCVs Gensets& LCVs

4KOMBATHigh discharge, High performance batteries which are compact light weight factory charge, explosion resistant and environmental friendly UPS, EPBX, Engine starting, Emergency lighting, SPB, Portable power, Fire alarm security systems.

5AMARA RAJA (POWER STACK) INDUSTRIESLight weight, study weather proof and long lasting, High integrity, High energy density.Industrial applications, Power plants, Railways, Telecommunications, process and service Industry, Defence, Motive, Power solar photo voltaic, Electric vehicle, Emergency lighting.

6AMARA RAJA GENPROZero maintenance, No specific gravity checks, No water tapping up required long life, ideal size factory charged, therefore ready to use assured starting and service.For Generators

7AMARON HI-WAY BATTEIRSLong life, Ultra low maintenance ready to fit, Higher cranking power.For Trucks

8QUANTA (UNINTERRUPTED LIFE)--Ups Batteries

9BRUTE (THE MOTIVE POWER HOUSE)Zero maintenance, No life time, No leaks, High energy density, No sulphation of plates, Valve Regulated, Safe and expansion proofFactory vehicles like fork lifts, Pal lot trucks, stackers and Platform trucks.

PROSPECTUS OF MF - VRLA BATTERIES IN INDUSTRIAL BATTERY INDUSTRY

The prospectus of MF - VRLA battery technology and the demand for VRLA batteries in various segments is estimated based on the following: Entry of multinationals in Telecom Sector. Data policy decision to upgrade the overall technology base Constraint in use of conventional battery in raido paging cellular segments. Switch over Railways to Maintenance Free Value Regulated for Lead Acid Batteries (MF-VRLA) for coach air conditioning to 100% level and the expected gradual shift for application like TL, S & T and Railway electricians. Technology up gradation and privatization of the power segments. Strong performance towards VRLA in the office automationindustry (UPS and EPABX applications due to user friendly and compact features). A Non availability of trained man - power and maintenance free characteristic of VRLA batteries makes them automatic choice for use in rural Telecom.PRODUTION FACILITIES, CPACITY EXPANSION AND PLASTIC PROJECT:During the year under review, ARBL had prioritized and directed its objectives towards streamlining the production process by assimilating and synchronizing capacities of different sections of the plans to optimize the capacity utilization. As a part of this program, ARBL has proposed to increase the capacity assemble and formation section. The reasons for the capacity expansion are as under:

To meet the growing demand for the power stack batteries To cope up with the peak level operations during the second half of the fiscal year. To improve the overall productivity and quality. To balance the "line capacity" of the plant with essential utilities and liabilities.To achieve the above, ARBL had conducted and elaborate study on the capacities of different sections and identified the section wide requirements. This had clearly spelt out the need for capacity expansion program. The plant capacity will increase from 160,000 to 275,000 batteries per annum. The estimated cost of expansion is Rs.10.80 crores.RESEARCH & DEVELOPMENT Specific areas in which the company carries out R & D, New product development. Process technology up gradation. Application engineering for new market place. Quality improvements.FUTURE PLAN ACTION Commercialisation of Motor-Cycle batteries. Development of new range high integrity VRLS cell design. Establishment of product for new application segment. Studies on paste additives to enhance the battery performance. In - depth evaluation of metal surface treatment chemicals to reduce the process cycle time. Validating alternative grades of propylene to conserve energy and to improve productivity.MAJOR USERS1.RAILWAYS: Train lighting, air conditioning, diesel engine starting, signaling systems, control systems, emergency breaking systems, and telecommunications.2.TELECOMMUNICATIONS: Central office power plants, microwave repeaters station, RAX in public building, emergency lighting systems at airports, fire alarm systems etc.3.POWER SYSTEMS: Switch gear control systems, power hose control systems, rural street lighting etc.4.UPS SYSTEMS: Back up power to computers in progress control systems in industry etc.5.TRACTION: Forklift trucks, earth moving machinery, mining locomotives and road vehicles etc.6.PETROCHEMICALS: Off-shore and on-shore oil exploration lighting systems, security systems etc.

7.DEFENCE: Defence communication, aircraft and helicopter ground starting, stationary and mobile diesel engine starting etc.

PRODUCTION PROCESSThe process for the production of lead acid batteries consists essentially of five operations described below:1.GRID CASTING:In the process grids to hold the active materials are made. Battery grids are produced using microprocessor casting machines with patented alloys. Different sizes of moulds are used to get the required size of grids.

2.PLATE PREPARATION

Using lead oxide production in earlier stage positive and negative paste is prepared with addition of Sulphuric acid and water. These pastes are applied to respective grids using industrial fasting machine3.CALL ASSEMBLY

Here positive and negative grids are separated by a sheet of fibre glass mat bush bars are welded and as assembled into a jar or container to form battery cells. Then these cells are assembled according to the customer's specifications into battery sets or systems.4.FORMATIONIn this process cells are filled with the electrolyte (Sulphuric acid) and then the set is charged and discharged repeatedly, after final charging the battery comes out ready to be used.5TESTING & INSPECTIONTesting the battery is discharged to the customer it is tested for quality specifications.

PROCESS FLOW CHART BATTERIES

Pasting Gird with Lead Oxide PasteFormationGird CastingSealing the JarGroup insertion JarFinishingWinding the pastedGrid with SeparatorPaste mixing by Adding sulphuric Acid and waterConverting Pure Lead into Lead OxideI/ Pure Lead

Fundamental analysisThe basic purpose of buying a security is to earn dividends and ultimately sell it at higher price. An investor therefore is interested in obtaining estimates of future prices of the share. These in turn will depend upon the performance of the industry to which the company belongs and the general economic situation of the country. The multitude of factors affecting a companys profitability can be broadly classified as:

1. Economic wide factors: these includes the factors like growth rate of the economy, the rate of inflation, foreign exchange rates etc which affects profitability of all companies.

2. Industry wide factors: these include factors which are specific to industry to which the company belongs. For instance the demand supply gap in the industry, the emergence of substitutes, and changes in government policies towards industry affects the company belonging to an industry.

3. Company wide factor: these factors are specific to a firm. The firm specific factors like plant and machinery, the brand image of the product, and ability of the management to affect the profitability.

Economic wide factorsThe following are the some of the important economic factors which influence the investment of investor over a period of time.

Indian Economy Overview

India's economy is on the fulcrum of an ever increasing growth curve. With positive indicators such as a stable 8-9 per cent annual growth, rising foreign exchange reserves, a booming capital market and a rapidly expanding FDI inflows, India has emerged as the second fastest growing major economy in the world. The economy has been growing at an average growth rate of 8.8 per cent in the last four fiscal years (2010-11 to 2013-14), with the 2013-14 growth rate of 9.6 per cent being the highest in the last 18 years. Significantly, the industrial and service sectors have been contributing a major part of this growth, suggesting the structural transformation underway in the Indian economy. For example, industrial and services sectors have logged in a 10.63 and 11.18 per cent growth rate in 2013-14 respectively, against 8.02 per and 11.01 cent in 2012-13. Similarly, manufacturing grew by 8.98 per cent and 12 per cent in 2012-13 and 2013-14 and transport, storage and communication recorded a growth of 14.65 and per cent 16.64 per cent, respectively. Another significant feature of the growth process has been the consistently increasing savings and investment rate. While the gross saving rate as a proportion of GDP has increased from 23.5 per cent in 2011-12 to 34.8 per cent in 2013-14, the investment rate-reflected as the gross capital formation as a proportion of GDP-has increased from 22.8 per cent in 2011-12 to 35.9 per cent in 2013-14. The Current Fiscal YearThe process continues in the current fiscal year. On the back of 9.9 per cent growth in the first half of 2013-14, GDP grew by 9.1 per cent during April-September 2013. While overall industrial production grew by 9 per cent during April-December 2014, importantly capital goods production rose by 20.2 per cent compared to 18.6 per cent during same period in 2013. Services grew by 10.5 per cent in April-September 2014, on the back of 11.6 per cent during the corresponding period in 2013-14. Manufacturing grew by 9.6 per cent during April-December 2014, on the back of 12.2 per cent growth during same period in 2013-14. Core infrastructure sector continued its growth rate recording 6 per cent growth in April-November 2014. While exports grew by 21.76 per cent during April-December 2014, imports increased by 25.97 per cent in the same period. Money Supply (M3) has grown by a robust 22.8 per cent growth (year-on-year) as of December 21, 2013 compared to 19.3 per cent last year. The annual inflation rate in terms of WPI was 3.5 per cent for the week ended December 29, 2013 as compared to 5.89 per cent a year ago. Fiscal and revenue deficit decreased by 11 per cent and 17.2 per cent, respectively, during April-November 2013-14 over corresponding period last year. With such a robust growth rates, the advance estimates of the Central Statistical Organization (CSO) expects the economy to grow by 8.7 per cent in 2013-14. Per Capita IncomeAlong this significant acceleration in the growth rate of Indian economy, India's per capita income has increased at a rapid pace, exceeding an earlier forecast made by Goldman Sachs BRIC report which estimated India's per capita to touch US$ 800 by 2014 and US$ 1149 by 2015. Per capita income has increased from US$ 460 in 2000-01 to almost double to US$ 797 by the end of 2013-14. In 2013-08, India's per capita income is estimated to be over US$ 825.13, according to the advance estimates of the Central Statistical Organisation (CSO). Further, India's per capita income is expected to increase to US$ 2000 by 2016-17 and US$ 4000 by 2025. This growth rate will, consequently, propel India into the middle-income category. Some HighlightsReflecting the favorable prospect of growth rate of Indian economy, the orders received Indian companies have increased by a whopping 68.6 per cent to US$ 32.48 billion during January-October 2014 compared to US$ 19.26 billion in the same period last year. India is among the five countries sharing 50 per cent of the world production (or GDP). FDI inflows have jumped by almost three times to US$ 15.7 billion in 2012-13 as against US$ 5.5 billion in 2012-13. The aggregate income of the top 500 companies rose by 28.4 per cent in 2013-14 to total US$ 469.51 billion. India's National Stock Exchange (NSE) ranks first in the stock futures and second in index futures trade in the world. Twenty Indian firms have made it to the list of Boston Consulting Group's 100 New Global Challenger Giants list. According to a study by the McKinsey Global Institute (MGI), India's consumer market will be the world's fifth largest (from twelfth) in the world by 2025. The number of companies incorporated has increased at an annual average of 55,000 companies in the last two years to 865,000, from 712,000 companies at the end of 2012. Four Indians and seven Indian microfinance companies make it to the Forbes list of Top10 world's wealthiest CEOs World's Top 50 Microfinance Institutions, respectively. India has the most number of private equity (PE) funds operating amongst the BRIC markets. Mumbai has been ranked tenth among the world's biggest centers of commerce in terms of the financial flow volumes by a survey compiled by MasterCard Worldwide. Another significant aspect has been the broad-based nature of the growth process. While new economy industries like Information Technology and biotechnology have been growing around 30 per cent, significantly old economy sectors like steel have also been major contributors in the Indian growth process. For example, India has moved up two places to become the fifth largest steel producer in the world. And with its manufacturing and service sectors on a searing growth path, Lehman Brothers Asia estimates India to grow by as much as 10 per cent every year in the next decade.1. Growth rate of industrial sector:

The growth of industrial sector is an important contributor to the growth of national income. The performance and the growth of industry is measured through an Index of industrial product. The industrial growth rate is further disaggregated into growth rates of different sectors like electricity basic goods consumer goods and so

Industry

Industry

YoY % changeFY07FY08FY09FY10FY11FY12FY13FY14

Mining & Quarrying13.70.55.85.34.415

Electricity7.343.13.255.25.26.5

Manufacturing7.25.42.967.49.19.110.7

IIP6.65.12.65.878.48.29.7

2. Inflation

Inflation prevailing in the economy has considerable impact on the performance of the companies high rates of inflation upsets business plans, results in high input costs and hence reduction in profit margins. On the other hand the inflation erodes purchasing power of buyer and results in reduction in demand for goods. The demand for consumer goods will particularly be affected adversely. Inflation is measured by sustainable price index number. The whole sale price index number is generally used for this purpose.

YearInflation rate (consumer prices)RankPercent ChangeDate of Information

20105.40 %642011 est.

20113.80 %92-29.63 %2012 est.

20124.20 %13410.53 %2013 est.

20134.20 %1250.00 %2014 est.

20145.30 %13926.19 %2015 est.

3. Interest rates

Interest rates reflect the cost and availability of credit to the companies operating in the economy. The interest rates and the volume as well as direction of the credit supply in the economy is influenced by monitory policy of the reserve bank of India (RBI). If the cheap money policy is pursued the interest rates are likely to be lower and larger volume of money supply is expected to be there in the economy.

The lower rate of interest implies lower cost of financing the companys operations and assures higher profitability, higher the rate of interest higher will be the costs of manufacturing and sale, which is expected to lead lower profit.Interest Rates

(% per annum)2-Apr3-Apr4-Apr5-Apr6-Apr6-Dec

Cash Reserve Ratio5.54.84.5555.3

Bank Rate6.56.36666

Reverse Repo rate (Absorption rate)654.54.85.56

Repo rate (Injection rate)87666.57.3

IDBI MT lending rate12.512.510.310.310.310.3

PLR of 5 major banks11.0-12.010.8-11.510.3-11.010.3-10.810.3-10.811.0-11.5

Deposit rate of 5 major banks (maturity>1year)7.0-8.55.3-6.25.0-5.55.3-6.36.0-7.06.8-8.0

Average call money rate3.6-7.52.0-5.12.1-4.53.3-5.54.2-6.25.4-12.0

4. Foreign exchange rates

If company is major exporter or importer its performance and profitability are likely to be affected considerably by the exchange rates of rupee against other currencies. A depreciation of rupee against US or other currency will make Indian products more competitive price wise. In the foreign markets, thereby stimulating export from India

5. Government budget.

The government budget provides detailed information on each of components of government spending and revenues. The deficit is essentially the excess of government spending on revenues. A budget deficit is often incurred for creating infrastructural facilities in the economy tends to create inflationary pressure. Due to this there is a strong public opinion against the governments creating of deficit without expanding the revenue.

6. Savings and investment.The capital market is channel through which the savings of households are made available to corporate for investment. Therefor the trends in saving and investment are significant in studying their impact on capital market.

Savings and Investment

% to GDP at constant pricesFY10FY11FY12FY13FY14FY15

By sector

Household Savings21.321.22223.123.522

Private Corporate Sector4.54.13.64.14.44.8

Public Sector-0.9-1.7-2-0.712.2

By types of assets

Physical Assets10.71111.212.71211.7

Financial Assets10.510.210.810.411.510.3

Gross Domestic Savings24.923.623.626.528.929.1

Net Capital Inflow1.10.60.2-1.2-1.61

Gross Domestic Investment24.32424.825.327.230.1

Errors and Omission11.1-2.10.111.6

Gross Capital Formation23.323.822.22527.430.2

Industrial analysis

BSE:500008|NSE:AMARAJABATEQ|ISIN:INE885A01032|SECTOR:Auto Ancillaries

12-May | 03:51PMOpen Price810.00

Price H/L823.80/803.85

Prev Close808.00

Volume9,023

52wk H/L946.05/377.30

Last Updated:12 May 2015, 03:51PM

KeyFundamentalsMarket Cap (Rs Cr.)13,842

EPS21.51

P/E Ratio37.67

Face Value (Rs)1.00

Latest Div. (%)323.00

Div Yield0

Book Value79.78

P/BV10.16

QuarterlyResults

PeerGroupBosch Ltd.21,487.55(-2.83%)

Motherson Sumi Systems Ltd.487.45(-4.76%)

MRF Ltd.35,402.65(-3.58%)

Exide Industries Ltd.151.50(-3.87%)

WABCO India Ltd.5,421.45(-3.04%)

ShareholdingPatternPromoters52.06%

Mutual Funds / UTI8.92%

FII / Banks18.13%

Others20.88%

AnnouncementsAmara Raja Batt. - Shareholding Pattern For March 31, 201509 Apr|10:21AM

Amara Raja Batt. - Commissioning of four-wheeler automotive battery plant at Unit II03 Apr|02:44PM

Amara Raja Batt. - FY15 results on May 28, 201501 Apr|02:08PM

InvestorReturnsTypeRatio / %XDate

Bonus1:214 Oct 2008

Dividend323.0030 Jul 2014

Split2.00:1.0025 Sep 2012

Company Analysis

Amara Raja Batteries Ltd Quarterly ResultsFigures in Rs Cr.Dec 2014% Chg(Quarterly) % Chg(Yearly)Peer RangeTrendSales1,059.55-0.0623.210.271558.65

Other Operating Income6.9028.73131.540.006.90

Operating Profit230.140.4726.790.14237.04

Other Income4.70-15.77-35.440.194.70

EBITDA237.041.1128.480.14237.04

Interest0.0650.00100.000.000.75

Depreciation28.80-21.4083.670.0035.21

Tax53.55-0.7014.230.0553.55

Net Profit102.342.037.710.02102.34

EPS (Rs)5.992.047.730.045.99

View Detailed Financials:Profit and LossCash FlowsBalance SheetQuarterly ResultsHalf Year ResultsCapital Structure

Amara Raja Batteries Ltd Stock Performancevs peersCompaniesLTPIntraday%1W%1M%1QTR%1YR%3YR%5YR%Trend -D|M|YAmara Raja Batt810.350.01-1.39-7.67-5.29102.44442.11852.79

Exide Inds.151.50-3.87-6.42-19.82-14.8630.8324.6928.83

Top Loser for the period amongst the peersTop Gainer for the period amongst the peers

Amara Raja Batteries Ltd Financial Comparisonwith peersManagement EfficiencyAmara Raja Batteries Ltd.Peer AveragePeer RangeTrendReturn On Equity (%)26.9616.045.6927.05

Return On Assets (%)17.3012.974.4318.13

Return On Capital Employed (%)20.4632.3714.5461.57

Fixed Assets Turnover (x)2.651.590.012.88

Profitability & GrowthGross Profit Margin (%)14.42-316.43-973.3313.01

Operating Profit Margin (%)16.30-306.93-948.9415.24

Net Profit Margin (%)10.5518.898.5038.63

Financial StrengthLiquidityQuick Ratio (x)1.472.030.613.88

Current Ratio (x)1.962.541.653.88

Cash Ratio (x)0.430.900.071.98

SolvencyDebt Equity Ratio (x)0.060.020.000.07

Coverage RatiosCash Flows to Long Term Debt (x)0.190.080.000.24

Amara Raja Batteries Ltd.PeerCompaniesCompanyCMP% ChangeMarket Cap52 Week H/L

12345>

Bosch Ltd.21,487.55-2.83%67,46927,990.00 / 10,468.10

Motherson Sumi Systems Ltd.487.45-4.76%42,989534.65 / 256.55

MRF Ltd.35,402.65-3.58%15,01542,474.90 / 20,000.00

Exide Industries Ltd.151.50-3.87%12,878205.20 / 115.05

WABCO India Ltd.5,421.45-3.04%10,2836,038.70 / 2,086.10

Apollo Tyres Ltd.169.60-0.79%8,633249.80 / 155.00

Balkrishna Industries Ltd.766.200.12%7,406856.00 / 535.55

Sundaram Clayton Ltd.1,879.65-1.01%3,8042,100.00 / 724.20

Sundram Fasteners Ltd.173.80-0.20%3,652218.00 / 73.75

Amtek India Ltd.126.851.16%3,526138.00 / 40.60

Price Changes of Amaraja Batteries DateOpenHighLowCloseTraded Value(Rs. Lakhs)No. OfTradesTradedQuantity

22-04-2015830.00838.00827.05832.9054.269326,517

23-04-2015835.00837.80818.50829.0073.358968,876

24-04-2015831.00831.00811.00816.6048.607755,922

28-04-2015784.00808.00778.00799.8060.629637,642

29-04-2015810.00810.00792.00798.2044.635865,602

30-04-2015795.00797.00778.00794.0096.481,46412,269

05-05-2015805.00838.50800.00824.40131.962,10316,144

07-05-2015821.00829.90802.55823.25129.682,38815,803

08-05-2015830.00830.00807.65816.2065.598978,024

CompanyResults(Rs In Cr.)Mar 15Mar 14Mar 13Mar 12Mar 11

Sales3451.752981.082371.031764.801467.36

Other Income30.4226.8711.515.442.80

Stock Adjustment-29.21-32.0912.17-28.32-35.69

Raw Material2101.191763.891499.341180.76914.28

Power And Fuel0.000.000.000.000.00

Employee Expenses158.32126.62100.2677.4962.37

Excise0.000.000.000.000.00

Admin And Selling Expenses0.000.000.000.000.00

Research And Development Expenses0.000.000.000.000.00

Expenses Capitalised0.000.000.000.000.00

Other Expenses646.03651.45401.59276.61236.91

Provisions Made0.000.000.000.000.00

Operating Profit575.42471.20357.67258.25289.48

Interest0.721.004.061.456.77

Gross Profit605.12497.07365.12262.24285.52

Depreciation64.5766.0946.4741.7142.95

Taxation169.23135.11103.5872.9287.60

Net Profit / Loss367.44286.70215.06148.10167.03

Extra Orinary Item-3.88-9.160.000.4812.06

Prior Year Adjustments0.000.000.000.000.00

Equity Capital17.0817.0817.0817.0817.08

Equity Dividend Rate0.000.000.000.000.00

Agg. Of Non-Prom. Shares(In Lacs)818.85818.85409.43409.43409.43

Agg. Of Non-Prom. Holding(%)47.940047.940047.940047.940047.9400

OPM(%)16.670015.800015.080014.630019.7200

GPM(%)17.370016.520015.320014.810019.4200

NPM(%)10.55009.53009.02008.360011.3600

EPS(In Rs.)21.5116.7812.598.679.78

Company financial health

The financial statements of the company can be used to understand and evaluate the financial performance and health of the company. Ratio analysis helps an investor to determine the financial strengths and weakness of the company.

The following is the ratio analysis of the AMARAJA Company

Balance sheet of AMARAJA

Mar '10Mar '11Mar '12Mar '13Mar '14

Sources Of Funds

Total Share Capital244.76244.76244.76244.76244.76

Equity Share Capital244.76244.76244.76244.76244.76

Share Application Money00000

Preference Share Capital00000

Reserves4,558.915,111.185,782.137,116.628,543.50

Revaluation Reserves00000

Networth4,809.675,295.946,026.897,301.388,788.26

Secured Loans5005005005000

Unsecured Loans31.0940.0936.9858.2489.33

Total Debt531.09540.09536.98558.2489.33

Total Liabilities5,334.765,835.976,563.877,859.628,877.59

Application Of Funds

Gross Block3,347.823,459.163,628.503,821.624,134.61

Less: Accum. Depreciation2,178.812,365.462,584.702,839.793,146.31

Net Block1,169.011,093.701,103.80981.83988.3

Capital Work in Progress67.55109.5798.12191.27312.58

Investments10.3328.988.958.298.29

Inventories2,001.122,109.882,916.113,744.374,217.67

Sundry Debtors4,135.784,608.485,972.147,168.129,695.82

Cash and Bank Balance1,119.441,510.631,392.861,483.972,128.91

Total Current Assets7,196.288,216.9910,281.1112,396.4015,982.40

Loans and Advances1,495.261,693.391,921.334,186.275,517.59

Fixed Deposits201.471,155.011,785.012,650.013,740.00

Total CA, Loans & Advances8,893.0111,125.3913,987.4519,232.6825,239.99

Current Liabilities4,094.185,339.667,248.998,911.1411,957.32

Provisions812.461,139.941,325.453,649.325,708.25

Total CL & Provisions4,900.646,479.608,574.4412,554.4617,665.57

Net Current Assets3,992.374,585.795,413.016,678.227,574.42

Miscellaneous Expenses95.517.92000

Total Assets5,334.765,835.966,563.887,859.618,877.59

Contingent Liabilities1,114.58815.79609.68769.95976.11

Book Value (Rs)196.26216.37246.24298.31359.12

Profit & Loss account

Mar '10Mar '11Mar '12Mar '13Mar '14

Income

Sales Turnover7,727.798,893.1710,682.1514,739.4619,118.33

Excise Duty728.49856.441,103.151,298.011,695.44

Net Sales6,999.308,096.739,639.0013,441.4517,362.89

Other Income69.0814.61259.98342.00482.32

Stock Adjustments-45.32-30.63539.77386.01181.37

Total Income7,023.128,020.7110,438.7514,169.4618,026.58

Expenditure

Raw Materials3,160.383,634.665,097.687,099.408,561.41

Power & Fuel Cost199.96196.81220.54229.01259.08

Employee Cost1,510.641,639.511,650.381,878.512,366.93

Other Manufacturing Expenses478.10598.67783.441,114.671,733.59

Selling and Admin Expenses532.98888.891,012.381,216.00887.55

Miscellaneous Expenses81.56193.58116.98126.27190.50

Preoperative Exp Capitalised0.000.000.000.000.00

Total Expenses5,957.627,152.128,875.4011,609.8613,999.12

Operating Profit996.36853.981,309.372,223.603,545.20

PBDIT1,125.44868.591,563.352,565.604,027.52

Interest54.7860.0881.4158.7543.33

PBDT1,010.66808.511,481.942,512.853,984.19

Depreciation185.35198.00218.87245.93244.61

Other Written Off0.000.000.000.000.00

Profit Before Tax825.31610.511,263.132,260.923,739.58

Extra-ordinary items-49.01396.59312.60299.86-13.79

PBT (Post Extra-ord Items)776.301,013.101,569.672,560.783,725.79

Tax291.51348.93616.30881.611,311.09

Reported Net Profit444.51658.15953.401,679.162,414.70

Total Value Addition2,797.243,517.463,777.714,510.465,437.65

Preference Dividend0.000.000.000.000.00

Equity Dividend97.90146.86195.81354.90599.66

Corporate Dividend Tax12.5419.0026.6449.7892.83

Per share data (annualised)

Shares in issue (lakhs)2,447.602,447.602,447.602,447.602,447.60

Earning Per Share (Rs)18.1626.8938.9568.6098.66

Equity Dividend (%)40.0060.0080.00145.00245.00

Book Value (Rs)196.26216.37246.24298.31359.12

AMARAJA Ratios calculations

sl.noratioformulayear

201420132012

1Net working capitalCA-CL7574.426678.225413.01

2current ratio CA/CL1.431.531.63

3quick ratioCA-(stock+prepaid exp)/CL1.131.171.22

4inventory turnover ratioCOGS/avg INV3.323.103.10

5debt equity ratiolong trm DBT/ Sh holders eq0.010.130.08

6interest coverage ratioEBIT/INTERST93.4243.4619.8

7gross profit marginGross profit / sales 1914.7111.25

8Net profit ratioEAT/ Net sales 13.5112.199.58

9cost of goods sold ratioCOGS/ net sales*10080.6386.3392.08

10Operating profit ratioEBIT/ Net sales 20.4116.5413.52

11return on equityNet profit/ share holders equity 27.4823.0015.82

12return on assets Net profit/total assets 27.6922.1115.77

13return on capital employed EBIT/ Total capital 44.1830.2820.82

14EPS Net profit available eq sh/ NO shares98.6668.638.95

15DPSDiv paid to ord sh / No of shares24.514.58

16P/EMPS/EPS22.9132.7519.70

17price to book value ratioMPS/BPS6.307.533.12

18book value per shareNet worth / no of shares359.12298.31246.24

19dividend payout ratioDPS/EPS*10024.8321.1420.54

20earning yieldEPS/MPS *1004.363.115.08

21dividend yieldDPS/MPS*1001.080.651.10

22total asset turnover ratioCOGS/total asst1.581.481.35

23capital turnover ratioCOGS/capital employed1.591.591.47

Interpretation: Net working capital:

NWC represents the excess of current assets over current liabilities. Companies should have sufficient NWC in order to be able to meet the claims of the creditors and the day to day needs of business. The greater is the amount of NWC greater is the liquidity of the firm. In AMARAJA company the three year NWC is as follows.

Sl.noRatioFormulaYear

201420132012

1Net working capitalCA-CL7574.426678.225413.01

The company from 2012 to 2014 has increased its NWC which shows that the company has good liquidity to its creditors.

Current ratio:

The Current Ratio expresses the relationship between the firms current assets and its current liabilities. The rule of thumb says that the current ratio should be at least 2 that is, the current assets should meet current liabilities at least twice.sl.noRatioFormulaYear

201420132012

2current ratio CA/CL1.43:11.53:11.63:1

Here we can see that the companys current ratio decreasing gradually.

Quick ratio:The quick ratio, also referred to as acid test ratio, examines the ability of the business to cover its short-term obligations from its quick assets only (i.e. it ignores stock). Clearly this ratio will be lower than the current ratio, but the difference between the two (the gap) will indicate the extent to which current assets consist of stock.sl.noRatioFormulayear

201420132012

3Quick ratioCA - (stock + prepaid exp)/CL1.13:11.17:11.22:1

Here we can see that the companys quick ratio is bit constant for three years and company is able to satisfy its creditors with this ratio.

Inventory turn over ratio:This ratio measures the stock in relation to turnover in order to determine how often the stock turns over in the business. It indicates the efficiency of the firm in selling its product.sl.noRatioFormulayear

201420132012

4inventory turnover ratioCOGS/avg INV3.323.103.10

In 2014: 12/ 3.32= 3.61 months In 2013: 12/3.1=3.87 monthsIn 2012: 12/3.10= 3.95 months. Here we can see that the companys working efficiency increased over a period of time. They are able to convert their inventory into sale in 3.61 months.

Debt equity ratio:This ratio indicates the extent to which debt is covered by shareholders funds. It reflects the relative position of the equity holders and the lenders and indicates the companys policy on the mix of capital funds. The ratio reflects the relative contribution of creditors and owners of business in its financing.sl.noRatioFormulayear

201420132012

5debt equity ratioLong trm DBT/ Sh holders eq0.010.130.08

Here we can see that the company gradually decreased its debt combination from its finance.

Interest Coverage Ratio:This ratio indicates how well the firms earning can cover the interest payments on its debt. sl.noRatioFormulayear

201420132012

6interest coverage ratioEBIT/INTERST93.4243.4619.8

Gross Profit Margin:Normally the gross profit has to rise proportionately with sales. It can also be useful to compare the gross profit margin across similar businesses although there will often be good reasons for any disparity. sl.noRatioFormulayear

201420132012

7Gross profit marginGross profit / sales 1914.7111.25

The ratio above shows the increasing trend in the gross profit since the ratio has improved from 11.25% in 2012 to 19.00% on 2014. This indicates that the rate in increase in cost of goods sold are less than rate of increase in sales, hence the increased efficiency.

Net profit ratio:sl.noRatioFormulayear

201420132012

8Net profit ratioEAT/ Net sales 13.51%12.19%9.58%

a high net profit margin would ensure adequate return to the owners as well as enable a firm to withstand adverse economic conditions when selling price is declining cost of production is rising and demand for the product falling.

Cost of goods sold ratio:sl.noRatioFormulayear

201420132012

9cost of goods sold ratioCOGS/ net sales*10080.6386.3392.08

This is one of the expenses ratios it is computed by expenses by net sales. The cost of goods sold ratio shows what percentage share of sales is consumed by cost of goods sold and conversely what proportion is available for meeting expenses such as selling and general distribution expenses as well as financial expenses consisting of taxes interest and dividend and so on.

Operating profit ratio:

This ratio reveals the profitability of sales resulting from regular business as well as buying, selling, and manufacturing operations.

sl.noRatioFormulayear

201420132012

10operating profit ratioEBIT/ Net sales 20.4116.5413.52

Return on Equity:

This ratio shows the profit attributable to the amount invested by the owners of the business. ROE measures the amount of money that the company has managed to generate for its shareholders.

sl.noRatioFormulayear

201420132012

11return on equityNet profit/ share holders equity 27.4823.0015.82

Here we can see that the companies return on equity is increasing constantly so we can say that the profitability to ordinary shareholders is strong and showing an upward trend.Return on assets:This ratio gives you an idea on the company's management effectiveness in utilizing its assets to make a profit for its shareholders.

sl.noRatioFormulayear

201420132012

12return on assets Net profit/total assets 27.6922.1115.77

The company ROA has increased constantly which its management efficiency in getting good returns from its assets.

Return on capital employed:

sl.noRatioFormulayear

201420132012

13return on capital employed EBIT/ Total capital 44.1830.2820.82

This ratio shows how efficiently the long term funds of owners and lenders are being used.

Earning Per Share:

For an equity investor, a companys EPS is the most important indicator of its performance. If the EPS is good, the company can pay dividends, plough back the surplus into reserves and issue bonus shares in the future. For these reasons, the market price of any companys share is largely influenced by its projected EPS

Sl.noratioFormulayear

201420132012

14EPS Net profit available eq sh/ NO shares98.6668.638.95

We can see here the companys EPS gone three times higher from three year.

Dividend per Share:

Sl.noratioFormulaYear

201420132012

15DPSdiv paid to ord sh / No of shares24.514.58

This indicates the dividend paid for each share. Shareholders would, naturally like to receive the maximum possible dividends from a company, consistent with its profits and need for retained earnings.

P/E Ratio:

P/E ratio is a useful indicator of what premium or discount investors are prepared to pay or receive for the investment. The higher the price in relation to earnings, the higher the P/E ratio which indicates the higher the premium an investor is prepared to pay for the share. This occurs because the investor is extremely confident of the potential growth and earnings of the share. sl.noRatioFormulayear

201420132012

16P/EMPS/EPS22.9132.7519.70

The above ratio shows that the shares were traded at a much higher premium in 2014 than were in 2012. In 2012 the price was 19.7 times higher than earnings while in 2014, the price is 22.91 times higher.

Price to book value ratio:sl.noRatioFormulayear

201420132012

17Price to book value ratioMPS/BPS6.307.533.12

It measures the relationship between the market price of an equity share with book value per share. The P/B ratio is significant in predicting future stock return. Firms with low P/B ratio had consistently higher returns compared to the firms with high P/B ratio.Book value per share:

sl.noRatioFormulayear

201420132012

18Book value per shareNet worth / no of shares359.12298.31246.24

This ratio indicates the net asset value of a companys share. A high book value indicates that the company has strong reserves, indicating scope for bonus shares, of course subject to necessary guidelines of the SEBI.

Dividend payout ratio:This ratio looks at the dividend payment in relation to net income and can be calculated as follows:sl.noRatioFormulayear

201420132012

19dividend payout ratioDPS/EPS*10024.8321.1420.54

Earning yield:This ratio highlights as a percentage a companys earnings vis-a-vis the current market value of its share. For blue chip companies this ratio tends to be around 5 per cent to 6 per cent.sl.noRatioFormulaYear

201420132012

20earning yieldEPS/MPS *1004.363.115.08

Dividend yield:The dividend yield ratio indicates the return that investors are obtaining on their investment in the form of dividends. This yield is usually fairly low as the investors are also receiving capital growth on their investment in the form of an increased share price.

sl.noRatioFormulaYear

201420132012

21dividend yieldDPS/MPS*1001.080.651.10

Total asset turnover ratio:sl.noRatioFormulaYear

201420132012

22total asset turnover ratioCOGS/total asst1.581.481.35

Total asset turnover ratio measures the efficiency of a firm in managing and utilizing its assets. The higher ratio indicates the more efficient management.

Capital turnover ratio:sl.noRatioFormulaYear

201420132012

23capital turnover ratioCOGS/capital employed1.591.591.47

Capital turnover ratio measures the efficiency of a firm in managing and utilizing its capital. The higher ratio indicates the more efficient management.

Value anchorPeriod & months2012/092013/092014/09CAGR

INCOME

Net Operating Income20822.6224971.7429947.61.20

EXPENSES

Material Consumption10155.7212313.6614915.581.21

Manufacturing Expenses2472.1163126.9193810.8341.24

Personel Expenses2591.4092837.1783112.2551.09

Selling Expenses248.2735277.4314310.01381.12

Administrative Expenses942.931098.8461144.5181.10

Cost of Sales16,410.4519,528.0923,281.20

Reported PBDIT4,412.175,443.706,666.41

Other Recuring Income783.43281220.5771901.641.56

Adjusted PBDIT5,195.606,664.288,568.11

Depreciation258.5655273.3171288.91101.12

Adjusted PBIT4,937.106,390.968,279.14

Finanical Expenses41.3449139.4513637.643390.95

Adjusted PBT4,895.696,351.518,241.491.37

Tax Charges1771.102392.3473231.6171.35

Adjusted PAT3,124.653,959.175,009.88

Non-recurring Items-13.4609-8.82512-5.786110.66

Other Non-cash Adjustments0.78

REPORTED PAT3,111.193,950.345,010.09

no. of shares24.4824.4824.48

Expected EPS FOR 3 YEAR127.09161.37210.42

risk free rateBetaEMRP

Average Dividend payout ratio25.28

Required rate of rate 18.681.19.5

Expected growth rate in dividend16.02

P/E Ratio9.81

AVG PE ratio23.74

Weighted PE ratio16.78

Expected future price of the AMARAJA CompanyYear 201220132014

Value ancher2132.302713.423429.62

Calculation of Intrinsic valueAverage Dividend payout ratio= sum of 5 years DPR/ 5Required rate of rate= risk free rate +(beta*EMPR)Expected growth rate in dividend= avg of retention ratio* avg of ROEP/E RATIO= AVG DPR / (required rate of risk-exp growth rate in div)AVG PE ratio= 5 years PE ratio/ 5Weighted PE ratio= calculated PE ratio+AVG PE ratio/2Value anchor = weighted PE ratio* expected market price

The following table shows the expected market prices of COMPANYCompany.year201220132014

value anchor2325.332451.382584.41

The following is the company management review

The following lines explain the chairmans speech of Company it tells about the companys strategy of future expansion and development strategy.

Performance overview:

India is one of the fastest growing economies globally with GDP growing at 9.4% last year. High capacity utilisation across various sectors is fuelling an up trend in capital expenditure. The scale of investment in infrastructure envisaged in the 11th Five Year Plan (2013-2012) will call for greater engagement by the private sector and international institutions. All these are lead indicators for growth. The conducive business environment coupled with a slew of measures taken by the Company for improvement of operational efficiency, institutionalization of a risk management framework and more judicious selection of projects, have yielded significant benefits. In Financial Year 2012-2013, the Company's order inflows & sales have grown by 37% and 19% respectively. The Company bagged its largest ever order in domestic & international markets such as expansion & modernisation of Delhi International Airport and an offshore platform project in Qatar. The order book as on March 31, 2013 stood at Rs. 369 Bn including Rs. 61 Bn from international business. The Company has achieved improvement in margins in all its business segments for the second year. The Subsidiary and Associate Companies have also performed well. During the year, the Company issued bonus shares in the ratio of 1:1 and recommended/paid dividend of-Rs. 13 per share on a face value of Rs. 2 per share. The market capitalization of the Company has increased further from Rs. 334 Bn to Rs. 456 Bn during the year and has outperformed the Sensex. Investing for profitable growth:

Investments are the oxygen of growth. Within the larger context of the country's increasing investments in building a brighter future, the Company is also investing in multiple spheres - people, technology, capacity expansion both domestically & internationally and brand building. This is essential for sustaining the growth momentum and continuous value creation.

People - Talent management:

Talent acquisition and retention is one of the key result areas for our senior managers. On an on-going basis, the Company renews, rejuvenates and adds Human Resource Management & Development systems, processes and practices to its repertoire and periodically does compensation benchmarking so as to ensure a vibrant and motivated workforce. The Company is constantly honing people management leadership skills of the employees and is increasingly investing in training centers across India. Innovative human resource initiatives like 'Campus to Corporate', launch of an e-learning portal - 'Any Time Learning', buddy referrals for talent acquisition, have been launched. As a result, the Company has been able to substantially increase its human resource. Technology - Building on core Amaraja strength:

Given our commitment to becoming a knowledge-based premium conglomerate, investments in technology across all businesses continue to remain at the forefront of the Company's business strategy. The Company has set up Amaraja design centers at Mumbai, Baroda, Chennai, Bangalore, and Delhi as well as in the Middle East. In line with our objective of emerging as a player with end-to-end capabilities in the power sector, the Company has signed an agreement with Mitsubishi Heavy Industries Limited, Japan for super critical boiler technology and is close to achieving a similar tie-up in the field of turbines.

International Business - Strengthening presence beyond India: The Company continues to forge alliances and to invest in international business for enhancing capabilities and achieving its vision of becoming an Indian multinational with focus in the Middle East and China. Joint ventures have been set up in Kuwait and Saudi Arabia for electromechanical construction in oil & gas, power and infrastructure sectors. The Modular Fabrication yard being set up at Sohar, Oman will strengthen the Company's presence in the Gulf region. The Company is receiving encouraging response from clients for project execution and Design & Amaraja services. The Company has set up manufacturing facilities in China for high- end switchgear & rubber processing machinery and a factory is also being built for industrial valves. These initiatives will accelerate the Company's thrust towards its `Lakshya' target of achieving 25% revenues from international business.

Capacity Expansion: The Company is expanding capacity internationally and within India. Substantial capacity augmentation at Hazira will help us address the growing demand in oil & gas industry. The Electrical & Electronics division is expanding its capacity at Mysore, Ahmednagar and Mahape to take care of rapid growth in the sector. The Company crossed a major milestone with the inauguration of the first two units at its 300-acre campus in Coimbatore. The facilities for the manufacture of industrial valves and switchboards are already accomplished. The campus will progressively see the establishment of manufacturing facilities for advanced tooling and high precision components in aerospace, nuclear power, defence sectors etc. The Company is building a state of the art Heavy Lift-cum-Pipelay vessel in partnership with SapuraCrest Petroleum Berhad, Malaysia that will give offshore installation capability and achieve significant competitiveness. All the divisions of the Company have planned increased investments in acquisition and installation of new equipment and manufacturing facilities.

Looking Ahead:

As we move on, the Company is well positioned to exploit the opportunities that will emerge from hydrocarbon, infrastructure, power, minerals & metals and other industrial sectors. The Public Private Partnership model is going to be the way forward for infrastructure projects in the country. Infrastructure Development Projects Limited has already consolidated its position with some completed projects and several under implementation across various sectors. With its capabilities augmented through the recent tie-up for manufacture of super critical boilers and the proposed collaboration for turbines, the Company will be in a position to set up complete power projects. Infrastructure Finance Company Limited has initiated funding in the infrastructure segment. The Company has commenced building ships at its Hazira Works. We are also scouting for a suitable site in India to set up a world-class facility for shipbuilding and repair, comparable to the best worldwide. The defence, nuclear power and aerospace sectors show potential and promise. The Raksha Udyog Ratna (RUR) status, when granted to the Company, will facilitate increased business in Defence sector. Leveraging its proven capabilities in construction and electrification for the railways, the Company envisages expanding its presence in this sector. Given the healthy order book position and the opportunities available, the Company believes that it will be able to achieve sustained growth. I am happy to share that the Company was ranked number 1 in two critical attributes - 'Quality' and 'Reputation' over a host of other corporates, in The Wall Street Journal Asia's nationwide survey of Indian companies. To conclude, I wish to place on record my appreciation for the outstanding commitment and smart work of all our employees. I am also grateful for the continuing support of my colleagues, our customers, business associates, shareholders and members of the Board. It is this collective effort and support of each member of Group's extended family that instills confidence in our ability for building on the profitable growth momentum into the future.

Finding and suggestion:

1. The following table shows the expected market of the AMARAJA stock for the period of 3 years i.e 2012 to 2014EXPECTED MARKET PRICE OF AMARAJA

particulars year

201220132014

FUNDAMENTAL ANALISIS 2170.852756.373491.62

TECHNICAL ANALYSIS 25003750

current market price(31-09-08)2,121.35

Analysis:

At present the company share price is very attractive and fundamentally undervaluedBecause the intrinsic value of the share is 2170.85 and current market price is 2121.35So one can have buy view on this stock from long term point of view.

Suggestion: Buy for long term point of view.

2. The following table shows the expected market of the COMPANY stock for the period of 3 years i.e 2012 to 2014

EXPECTED MARKET PRICE OF L&T

Particulars year

201220132014

FUNDAMENTAL ANALISIS 2325.332451.382584.41

TECHNICAL ANALYSIS 44505800

Current market price3,024.80

Analysis:

Above table shows the company script is mainly technical driven there is less scope for fundamental analysis. Companys intrinsic value is Rs. 2325.33 but the current market price is Rs. 3024.8. By this we can say that the company is overvalued according to fundamental analysis. But when we analyze by technically the stock is having good support and resistance so we can say that the stock moves upto 4450 in short run and in long term the stock is predicted to go around 5800.

Suggestion: If investor at present holding this stock should wait for some time to get good return in short term the stock may go for Rs. 4450 and in the long run the stock may go to Rs. 5800.

Suggestion: Hold for time being and sell when stock breaks its previous support.

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