Amara Raja Batteries is expanding its four-wheeler battery manufacturing capacity at its Chittoor plant with an outlay of Rs 14 crore.

This expansion, which will take the battery capacity up from 5.6 million units to 6 million units a year, is a new initiative that the board approved, according to Suresh Kalyan, Chief Financial Officer of the battery major.

It will be ready by the third quarter this year as it is being undertaken at the existing manufacturing unit, he said.

“The capacity utilisation for four-wheeler batteries is now at 86 per cent and projected to touch 90 per cent by the year end. This new capacity will be just in time as we get into full capacity utilisation,” he said.

A third of the company’s battery supply in the automotive sector goes to original equipment manufacturers and two-thirds to the aftermarket.

“The business from automotive OEMs is challenging. It is relatively subdued because of various factors, including the strike at Maruti’s Manesar plant.

This may impact volumes. However, we are confident of achieving double-digit growth,” he told Business Line.

The two-wheeler battery capacity is 4.8 million units a year; of this, 3.6 million units go to replacement and the rest to OEMs.

Shares of Amara Raja Batteries hit a new high, touching Rs 404 before retracing to Rs 382.45 — up 5.14 per cent during the day’s trade on Thursday.

rishikumar.vundi@thehindu.co.in

(This article was published on August 16, 2012)
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