Indian battery maker Amara Raja's quarterly profit falls on higher costs
May 29 (Reuters) - Indian battery maker Amara Raja Energy & Mobility (AMAR.NS), opens new tab reported a 27% fall in fourth-quarter profit on Thursday, as higher costs overshadowed steady demand for its services.
Analysts said Amara Raja's power and operational costs were higher in the quarter, although the company benefited from steady demand for auto aftermarket services, which includes replacing original equipment batteries.
Amara Raja, which counts top automakers including Bajaj Auto (BAJA.NS), opens new tab, Hero MotoCorp (HROM.NS), opens new tab and Maruti Suzuki (MRTI.NS), opens new tab as its clients, derives almost three-fourth of its revenue from the automotive battery business.
India's total vehicle production increased 1.8% in the March quarter, compared with a surge of 20.1% in the same period a year ago.
Cost of materials consumed, which makes up more than half of the battery maker's total expenses, grew 10% in the quarter, pushing total expenses up by 10% as well to 27.70 billion Indian rupees ($324.38 million).
The company's net profit after tax dropped to 1.67 billion rupees for the quarter ended March 31, from 2.28 billion rupees a year earlier.
In February, the company had flagged margin headwinds in the quarter from currency depreciation and fuel purchase agreements.
Amara Raja, which also makes industrial batteries for sectors like telecom and railways, reported a 6% increase in revenue from operations to 29.74 billion rupees in the January-March quarter.
Rival Exide Industries (EXID.NS), opens new tab posted a smaller-than-expected quarterly profit in late April, hurt by high raw material prices.
($1 = 85.3930 Indian rupees)
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