Amara Raja Batteries Limited - Annual Report Summary 2023
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About the company
Formed in 1985, Amara Raja Batteries Limited, the flagship company of the Amara Raja Group, is the technology leader and is one of the largest manufacturers of lead-acid batteries for both industrial and automotive applications in the Indian storage battery industry.
In India, Amara Raja is the preferred supplier to major telecom service providers, Telecom equipment manufacturers, UPS sector (OEM & Replacement), Indian Railways and to Power, Oil & Gas among other industry segments.
Business Segments
AUTOMOTIVE - BATTERY DIVISION
Largest player in the automotive aftermarket battery segment in India.
Largest 4W battery exporter in India.
First to manufacture AGM motorcycle batteries in India.
First to manufacture Punched Grid motorcycle batteries in the World.
Also the first to manufacture AGM car batteries in India.
In the market as AmaronTM and PowerZoneTM.
First Company in India to manufacture Valve Regulated Lead-Acid (VRLA) batteries.
INDUSTRIAL BATTERY DIVISION
Caters to several key sectors, including UPS, Telecom, Railways and other specialty batteries.
Pioneers in VRLA battery tech in India.
Company has the largest market share in the Indian Telecom Industry battery segment.
Largest exporter of VRLA batteries from India.
Largest market share in the Indian Data Centre battery segment.
In the market as PowerStack© , Amaron Volt © , Amaron Quanta©, Amaron Sleek© , Amaron Brute© & Amaron Solar©
NEW ENERGY BUSINESS
The company established a subsidiary Amara Raja Advanced Cell Technologies (ARACT) for its New Energy business.
ARACT is focused on developing advanced cell chemistries tailored to Indian conditions and supplying battery packs and chargers to 2W and 3W OEMs.
To bring greater focus to New Energy Business, Amara Raja has transferred its existing Pack and Charger business to its wholly-owned subsidiary ARACT, via a business transfer agreement.
Amara Raja’s new energy business focuses on leveraging lithium-ion chemistry which will cater to the requirements of diverse sectors namely the electric vehicle sector, renewable energy markets and energy storage systems.
The Company has created a portfolio of 0.5Kwh to 21.0Kwh products catering to e-mobility and energy storage applications in India.
Network
AmaronTM and PowerZoneTM branded products are sold through the company’s strong distribution network comprising 500+ distributors and 100,000+ retail touchpoints.
Exports
Amara Raja products are exported to 50+ other nations worldwide.
2022-23 Highlights Of Different Sectors Of The Business
AUTOMOTIVE BATTERY DIVISION
OE business witnessed double-digit growth in FY23 in both the four-wheelers and two-wheelers segments.
Aftermarket performance: The aftermarket segment registered double-digit growth in both four- and two-wheeler segments.
Outsourcing: To cope with the demand for tubular batteries for home inverter applications, the Company outsourced the manufacturing of these batteries to quality-conscious vendors while maintaining strict control of the process and quality parameters.
The Company is working towards introducing world-class proprietary ‘Duraframe’ plate technology and expanding the product portfolio by leveraging its cutting-edge AGM and EFB technologies.
INDUSTRIAL BATTERY DIVISION
The Industrial Battery Division reported a significantly improved performance compared with earlier years - registering a 20% growth at the top line.
Telecom: Demand from the telecom sector registered double-digit growth, although pricing pressure continued unabated. In some private telecom network pockets, 5G rollouts happened with Lithium batteries.
UPS: Large investments in Data centres and many government projects contributed to accelerated demand.
Exports: registered moderate export growth despite headwinds in established markets of Africa and the APAC regions. Recently widened reach in the MEA region significantly improved numbers.
NEW ENERGY BUSINESS
Lithium-ion battery packs:
Received AIS 156 amendment -2 certification for 3W battery packs.
Introduced new IP-67-rated packs for 2W and 3W applications along with commercial supplies.
Developed 2KWh battery pack for 2W application and 10.2 KWh battery pack for 3W application.
Received approval for 5KWh packs for telecom application from BSNL.
Opportunities
INDUSTRIAL BATTERY DIVISION:
Telecom
Robust demand
Rural teledensity growth from 59.06 to 60.27% in the last 12 months indicates potential demand growth from Rural Sector
USFO/DOT projects to focus more on rural demand initiatives by DOT 28K sites targeted through USDF.
Highest data consumer market and expected to continue
Emerging IOT; use cases and many Application-enabling through 5G
Policy support
100% FDI from 49%
Telecom Ministry working on a new data centre bill to enable more numbers of data centres deployment.
Revival package Rs.1.67 Lakh Cr to BSNL & MTNL.
To boost ‘Make In India’ and to drive chip shortages government has introduced PLI schemes for Telecom Sector
Attractive opportunities
5G growth expected to be 690Mn by 2028 accounting 50% of mobile subscribers
Better ARPUs projected for OPCOs with revised tariffs.
5G enable to generate enterprise business opportunities in sectors like Logistics, Agriculture, Healthcare, etc.
Increasing investments:
DOT allocated Rs. 26,737 Cr in FY23 for UCV & LWE
Rs. 44k Cr is getting infused into BSNL.
Indigenous 5G active equipment plants set up in India by Ericsson, Nokia and Tech Mahindra.
UPS
Though many new Data Centres are expected to go with Lithium batteries, the overall potential of Lead Acid batteries remains considerably attractive.
As of May 2022, India has around 127 data centres. Data Center capacity will only increase over the coming years. Case in point: in 2021, the data centre market in India was valued at US$4.35 billion and is predicted to reach US$ 10.09 billion by 2027. (Source: globalwire.com)
Battery Energy Storage Systems: This market has been emerging and promising in the industrial and commercial segment in the last few years, particularly with massive Renewable Energy penetration.
NEW ENERGY BUSINESS
In the marketplace, the Company will commercialise its 2W battery packs.
In the automobile sector:
Develop upto 15KWh LFP batteries for sustainable growth in 3W segment.
Develop medium voltage packs upto 20KWh pack for LCV application
Develop high-voltage EV battery packs for 4W and passenger applications.
Large projects:
Proposed to invest Rs. 9,500 crs to create the Amara Raja Giga Corridor (ARGC).
MoU signed with the Government of Telangana.
Groundbreaking at Divitipally for Amara Raja’s Gigafactory.
Commenced implementing phase-1 of the project consisting of a customer qualification plant and the first giga-corridor.
Threats
AUTOMOTIVE BATTERY DIVISION
A drop in demand would impact business prospects
Attrition of talent would impact business operations
Inflationary headwinds would adversely impact the division’s cost sheet
INDUSTRIAL BATTERY DIVISION
Demand Risk - Demand for batteries could witness a slowdown from key user segments.
Technology Risk - Fast-paced changes in the technology world could impact business prospects.
Geographic Risk - Over-dependence on single geography could impact business prospects.
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