The Hindu Business Line : Funds' buying boosts Amara Raja Batteries

THE Amara Raja Batteries stock moved up further on purchases by a couple of large broking firms. The buy recommendation from these firms, based on expectation of improvement in the fundamentals during the third quarter, has aroused some retail interest also.

According to dealers, Kotak Securities and Enam Securities are believed to have picked up the stock substantially today.

It moved up by around Rs 20 to close above Rs 95 on the Bombay Stock Exchange and the National Stock Exchange. The traded quantity in the stock jumped roughly 10 fold today on the BSE at 6.97 lakh shares and over 8 times on the NSE at 8.68 lakh shares. Some 26.7 per cent of the traded shares on the BSE was presented for delivery.

A section of the market players, however, is little chary of putting a premium on the stock in the context of alleged insider trading in the counter during 1999-2000. According to Mr Mathew Easow of matheweasow.com, though fundamentally and technically the company seems to be on a sound footing, in market circles it still does not generate enough confidence because of its restricted image and a relative reticence towards sharing information.

According to Devarsh Vakil, the Amara Raja's recent strategic partnership with Johnson Controls Inc, a Fortune 500 company, is being seen by the market as a positive development. At today's closing price, the stock traded at P/E multiple of 25 on trailing 12-month earnings per share of Rs 3.75 per share.

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