Hyderabad: Industrial and automotive batteries manufacturer Amara Raja Batteries, in which the US battery giant Johnson Controls holds 26% stake, has decided to spend Rs 440 crore on augmenting production capacities of its VRLA and four-wheeler batteries over the next 16-18 months.
The board of the company, which met on Monday to take record the audited financial results for the quarter ended December 2012, has approved the proposal on investments on expansion of large VRLA and four-wheeler batteries of the company's facilities located near Tirupathi in Andhra Pradesh.
Executive Director Ravi Bhamidipati said the fresh investments were in addition to already approved capital investment of Rs 304 crore to expand capacities in medium VRLA, automotive four-wheeler and automotive two-wheeler lines.
Amara Raja manufactures batteries to Indian railways,power, oil and gas sectors. It counts among its major clients the leading Indian automobile players such as Ashok Leyland, Ford India, Honda, Hyundai, M&M, Maruti Suzuki and TATA Motors. The company also exports products to Asia Pacific, Africa and Middle East.
"We continue to enjoy debt free status with free cash of over Rs 350 crore as on December 31, 2012. The capacity expansion programs undertaken in the last 12 months are progressing as per schedule," said chief financial officer K.Suresh.
For the quarter to December 2012, Amara Raja reported a 23% growth in its consolidated net profit at Rs 81 crore compared to the same quarter a year ago of Rs 66 crore, while it saw its net sales grew by 24% at Rs 757 crore from Rs.612 cr a year ago.
Managing Director Jaydev Galla said teh company is confident of growth prospects and continues to invest in capacities in the medium to long range despite slack demand from OE customers in automotive segment, supply challenges, power tariff hike, rising commodity and fuel prices and volatility in currency markets.
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