Motilal Oswal has given Neutral recommendation for Amara Raja with a target price of Rs. 590 in its research report issued on May 22, 2022
Motilal Oswal’s research report on Amara Raja
AMRJ’s 4QFY22 earnings were impacted by RM cost inflation, logistical bottleneck in exports, higher competitive intensity, and migration to a stamp grid tech platform in 2W production. The recent moderation in lead prices will aid a margin recovery. Volumes should see good growth across segments in FY23. We largely maintain our FY23/FY24 EPS estimate.
However, we cut our P/E multiple to 12x from 14x to account for the recent increase in the risk-free rate and risk due to shift towards EV. We maintain our Neutral rating with a TP of INR590/share (12x Mar’24E EPS).