Amara Raja expands Automotive battery capacity

Amara Raja Batteries Ltd has announced that in keeping with the Company´s growth strategy, the Board of Directors of the Company at its meeting held on August 14, 2006 has approved investment of Rs 882 mm to increase automotive battery capacity by 50% from 3.6 mm units per annum to 5.4 mm units per annum. The expansion is expected to be completed by the second quarter of FY 08.

The Company, which has been posting significant top line and bottom line growth in the past two years, has been consistently on expansion mode. With the completion of the current expansion, the Company would have more than trebled capacity since January 2005. The current expansion to 5.4 mm units would be the single largest investment made in the Automotive Battery business by the Company.

The Company´s Aftermarket retail network has been further expanded which now comprises of over 135 franchisees from 125 at the end of the previous fiscal. The Company currently has a pan. India sales and service network with 135 franchisees, 99 Pitstops and over 12000 active retailers. Export would continue to be a focus area.

Announcing the investment plans, Mr. Jayadev Galla said,

"To keep pace with our growing volumes, we are expanding our capacity in Automotive batteries by 50% to 5.4 mm units per annum and will be investing Rs 882 mm for this.

We have been experiencing high growth in our Automotive battery business. We have been extremely successful in expanding OE business, Aftermarket replacement and Automotive Exports. We have been consistently scaling up capacity to gear ourselves to tap the growth we foresaw a few quarters back. We need this expansion to meet market requirements in the next financial year. Once this expansion is completed, the turnover of our Company should exceed Rs 1000 cr".

Mr. Ramachandra N Galla, Chairman, said:

"We have been growing significantly and this can be witnessed by the results that the Company has been posting. I am happy to see that the 1 mm Automotive Battery facility commissioned in Sep 2001 would now grow to 5.4 mm units by the middle of next financial. The rollout of Amaron has been extremely successful and we will continue to grow volumes profitably."

Source : Equity Bulls

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