(Reuters) – 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 manufactures 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 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 its clients.
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%.
($1 = 84.0840 Indian rupees)
(Reporting by Meenakshi Maidas in Bengaluru; Editing by Sonia Cheema)
