Thanks for sharing the presentation.
What are your views on the New Energy Business?
The way I am thinking about this is:
- It will call for significant amount of CAPEX, in fact, this business will demand CAPEX much more than legacy business.
- This business does not seem to be margin accretive, I gather that margins will be lower than legacy business.
- At some point they will have to take on debt.
- Scaling up Li-ion cells have been a challenge with many giants, Amara Raja would be no exception I believe.
- Raw materials sourcing could also be potentially challenging given the relations with China who is controlling much of the raw materials.
Based on these thoughts, I feel long term profitability is going to be challenging. Will appreciate your views.
Thank you!
Ketan
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