I started reading up on this company in recent months and it seems to be an interesting case given the frenzy in the small/mid cap space. Few things which interested me are:
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Reasonable valuations. When most of the things are trading at 25-30 PE, I was surprised to see a large branded consumer facing company available at about 12-15 PE
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It seems the de-rating could have been due to risk of EV on the core business. However, few months back, Amara raja announced aggressive plans to foray into this segment. Though it needs to be seen if what will they do and what will be their edge.
Interestingly they already have created this new energy segment and are growing rapidly on a small base
- They do intend to keep growing the lead battery business too and are targeting exports etc. They are also looking at data centres etc.
Risks – 1. EV foray – don’t know what will be their value proposition 2. Political risks
Ayush
Disc: Invested in family and client acs
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