Indian battery maker Amara Raja's Q2 profit rises on steady automotive demand

Indian battery maker Amara Raja Energy & Mobility reported a 6.3% rise in second-quarter profit on Monday, aided by continued demand from automotive manufacturers.

The company's net profit rose to 2.41 billion rupees ($28.7 million) for the quarter ended Sept. 30, from 2.26 billion rupees a year earlier.

However, this is its slowest quarterly profit growth in a year as car manufacturers moderated dispatches to dealers to help reduce high inventory during the quarter.

This also resulted in rival Exide Industries reporting a smaller-than-expected profit earlier in the day.

India's total vehicle production increased 9% in the September quarter but slowed down sequentially from 16.1% in the first quarter, according to the Society of Indian Automobile Manufacturers (SIAM), an industry body.

Amara Raja, which derives almost three-fourths of its revenue from its automotive battery business, counts top automakers including Bajaj Auto, Hero MotoCorp and Maruti Suzuki among itsclients.

While Amara Raja's revenue from operations increased 11.6% to 31.36 billion rupees during the July-September period, this is its slowest growth since the December quarter.

Analysts say that the growth was driven by the company's aftermarket division - which includes replacing original equipment batteries - and a rise in its two-wheeler battery division.

Amara Raja's shares closed 2.2% lower ahead of its results. They have risen 68.4% so far this year, while those of Exide Industries jumped 40%.

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