BENGALURU (Reuters) – India’s Amara Raja Energy & Mobility on Tuesday reported a jump in second-quarter profit, as improved demand for its products helped offset higher expenses.
The Amaron battery maker’s consolidated net profit after tax came in at 2.26 billion rupees ($27.2 million), up nearly 13% from a year ago.
Improved rainfall in September led to a recovery in rural demand, particularly for two-wheelers, analysts said, leading to increased battery sales for Amara Raja.
Amara Raja’s clients such as Maruti Suzuki have also boosted production as semiconductor supplies improved. Auto ancillary companies benefit from improved automobile production, which was hurt last year by chip supply chain issues.
The company’s revenue rose over 9% to 29.59 billion rupees, boosted by a 6.5% climb in its lead acid batteries and allied products segment which accounts for nearly all its revenue.
The segment also includes its industrial business, which benefitted from expansion of India’s 5G network, as Amara Raja also catering to telecom equipment manufacturers.
Expenses, however, rose 9.4%, led by a 7.6% increase in input costs. Average prices for key battery material lead increased 14% year-on-year.
The company plans to expand into the two-wheeler electric vehicle (EV) market, first through chargers and then batteries, as part of an expansion to triple its lithium-ion business this financial year, a top executive told Reuters in August.
Amara Raja is the first of India’s major listed battery makers to report earnings. Shares of the company closed down 2.9% ahead of the results.
($1 = 83.2484 Indian rupees)
(Reporting by Varun Vyas and Manvi Pant in Bengaluru; Editing by Varun H K)