Amara Raja the pioneer in VRLA battery in Asian Pacific Rim has foray into automotive batteries with

its new brand called AMARON addressing automobile segment launched across country by opening many franchises ! pit stops covering all metros major cities and urban towns" Battery is the second need of any vehicle after the fuel. The Battery consists of Positive and Negative Plates, which are made up of Active material (Lead oxide !ulfuric Acid", #rid and !ulfuric Acid.

1.2 INDUSTRYPROFILE:
A battery is an electrochemical device in which the free energy of a chemical reaction is converted into the electrical energy" #he chemical energy contained in the active materials is converted into electrical energy by means of $lectrochemical O%idation&reduction reactions" 't is the only device which can store electrical energy in the form of chemical energy and hence it is called a storage battery" (ealed maintenance free )(M*+ batteries and Value Regulated Lead Acid )VRLA+ technology are leading the battery industry in the recent years in automobile and industrial battery sector around the globe VRLA batteries have become the preferred choice in various applications such as uninterrupted power supply emergency lights security systems and weighing scales" (M* ,atteries come under the rechargeable battery category so it can be used a number of times in the life of a battery" (M* batteries are more economical than Nic-el&.admium batteries" #hese batteries are more compact than the wet type batteries" 't can be used at any position/ these batteries are very popular for portable power re0uirements and space constraint applications" $%LA &atteries are lea' proof, spill(proof and explosion ) resistant and having life duration of *+(,- years. These &atteries withstand the environmental conditions due to high technology, in &uilt in the &atteries. .ach cell is housed in a power coated steel tray ma'ing them convenient to transportation and installation, so transit damages are minimi/ed in the case of these &atteries.

About Johnson Controls: 1ohnson .ontrols 'nc" ran-s 234th among the *ortune 566 companies in the world as the largest ,attery manufacturer in North America and second largest in the world" 't was named by a 7ee- Maga8ine as one of the 97orld:s 266 ,est Managed .ompanies; for the #hird consecutive year and the *orbes Maga8ine praised it as 9America:s ,est #echnology <sers;" 't has also won the =eneral Motors 9(upplied of the >ear; award as well as 9Manufacturing $%cellence Award; by National Association of Manufacturers" ,eing a Leader in Auto ,attery Mar-et it has become the O$M )Original $0uipment

Manufacturer+ (upplier to ?aimler .hrysler *ord @onda and Nissan ! #oyota" 't:s after Mar-et .ustomer includes Auto Aone interstate ,attery (ears and 7al&Mart" 1.' heading its operations from Milwau-ee is a 5B year old .ompany spanning its operations through Automotive (ystems =roup and .ontrols =roup with a turnover e%ceeding 2B"5 ,illion <"( ?ollars and Net Profit crossing 366 Million <( ?ollars for the year 2CCD" 'ts Automotive ,usiness accounts for EFG of #otal (ales and .ontrols ,usiness B4G of (ales" 'ts Automotive (ystems =roup is enjoying leadership in North America and $urope and has become the largest Auto (eating supplier in (outh America" 't has got (trategic alliance with $uropean 'nterior (ystems Major" 1.' manufactures Lead acid ,atteries and VRLA ,atteries and mar-ets under the ,rand name H?ynasty:" 'ts products ranging from seating systems ?oor (ystems 'ntegrated $lectronics and 'nstrument Panels virtually cover $very Major Automa-er" 'ts recent ac0uisition of ,ac-er:s =roup an Automotive 'nterior (upplier .ompany who got E6G Mar-et share in $urope is adding new platform in 'nterior (ystems =rowth ,usiness" 7hen it comes to .ontrols =roup it has achieved $%cellence both in New .onstruction and $%isting ,uilding Mar-ets" 't is being selected as preferred (upplier to <( *ederal =overnment:s (uper $nergy (avings Performance .ontract Program" #ill now it has 'nstalled 26666 Metasys 'ntegrated *acility Management (ystems across North America and $urope" 'ts New Projects e%tends to Pentagon Iremlin and ,eijing" 1apan has awarded the *irst .ontract to it in 'ntegrated *acility Management (ystems" 7ee- Maga8ine rated it as one among the 97orlds 266 ,est Managed .ompanies; for the #hird consecutive year and the *orbes Maga8ine praises it as 9America:s ,est #echnology <sers" 't has also won the =eneral Motors 9(upplier of the >ear; award as well as 9Manufacturing $%cellence award; by National Association of Manufacturers" 'ts =erman (eating Plant in ,ochum has been declared as the ,est *actory by leading =erman Maga8ine" 't foresees growth in Automotive (eating and 'nteriors (ystems in North America and $urope in the years to come"

,eing a Leader in Auto ,attery Mar-et it has become the O$M )Original $0uipment Manufacturer+ (upplier to ?aimler .hrysler *ord @onda Nissan and #oyota" 'ts After Mar-et .ustomers includes AutoAone 'nterstate ,attery (ears and 7al&Mart" Apart from this $%isting ,usiness (cenario it is grabbing opportunities in <( =ovt":s Mar-et through Performance .ontracting which helps .ustomers li-e <( ?epartment of ?efense (chools and other *ederal Agencies to reduce their $nergy .osts by Millions of ?ollars annually through up gradation of their Lighting @eating and .ooling .ontrol (ystems"

1.3 COMPANY PROFILE

@ardly a decade ago was Iara-ambadi in itself a non&descript faceless village" #here has been no great tradition of industry in and around that area" #he #echnocrat entrepreneur (ri" Ramachandra Naidu =alla hailing from .hittoor ?istrict of Andhra Pradesh has done M( in .ontrol (ystems at Michigan <niversity <(A" @e started his career as an engineer in the <(A wor-ed for 2E years speciali8ing in the areas of <P( systems battery chargers and batteries has promoted Amara Raja ,atteries as a private limited company in the year 2CD5 by the inspiration of his uncle Mr" P" Raja =opal Naidu to manufacture Value Regulated Lead Acid )VRLA+ ,atteries for the first time in 'ndia at Iara-ambadi to develop this region" Amara Raja has a strategic tie&up with 1ohnson .ontrols 'ncorporation of <(A" Amara Raja went into public in the year 2CC2" Amara Raja and 1ohnson .ontrols 'nc/ both are having a B4G each share in AR,L and the remaining is on public share" Amara Raja is a company with commitment to achieve e%cellence in all its activities" #he company is currently poised on a healthy growth curve and ended the financial year B662&6B with a turnover of around Rs"B66 crores" Amara Raja is the largest manufacturer of Maintenance *ree J Value Regulated lead acid batteries )M*&VRLA+ batteries in the 'ndian Ocean rim and 1ohnson .ontrols is the largest manufacturer of Lead Acid batteries in North America and a leading global supplier to major automobile manufacturers and industrial customers" #he synergy of Amara Raja and 1ohnson .ontrols compliments the strengths of both product design and mar-et presence" #his joint venture meets the re0uirements for a global source for 'nternational 0uality batteries and support services for both Auto and 'ndustrial applications in this region" ,y employing latest generation technology and with a clear understanding of current power bac-&up re0uirements Amara Raja has become the benchmar- in the

manufacture of 'ndustrial batteries" 'n a brief span of 5 years since commencing of commercial operations AR,L has emerged as a largest manufacturer of standby VRLA batteries in the 'ndian Ocean rim comprising the area ranging from Africa and the Middle $ast to (outh $ast Asia" Amara Raja has its Registered Office in Iara-ambadi near #irupathi in A"P" Iara-ambadi is located at an appro%imate distance of 2B -ms from #irupathi" #he manufacturing campus at Iara-ambadi is one the most beautifully landscaped campuses and boasts of the state of the art manufacturing facilities" #he factory employs more than 2666 employees and has fully integrated manufacturing plants on a single campus"

AWARDS FOR AMARA RAJA BATTERIES LTD: 2 9#he (pirit of $%cellence; J awarded by Academy of *ine Arts #irupathi" B 9,est $ntrepreneur of the year 2CCD; J awarded by @yderabad Management Association @yderabad" 3 9Industrial $conomist ,usiness $%cellence Award; J in 2CC2 awarded by the 'ndustrial $conomists .hennai" F 5 9$%cellence Award; J by the 'nstitution of $conomic (tudies New ?elhi" 9<dyog Ratan Award; J by the 'nstitution of $conomic (tudies New ?elhi"

4 9$%cellence in $nvironmental Management; for the year B662&6B from the Andhra Pradesh (tate Pollution .ontrol ,oard" MILESTONES OF ARBL: Y ar Mil st!n 2CCE Rs"266 .rores turnover 2CCD '(O&C662 accreditation 2CCC K(&C666 accreditation B662 Rs" B66 .rores turnover

AMARA RAJAS STRENGTHS: 2 Proven technology from =N, and being a pioneer" B (trong and well organi8ed customer base 3 F 5 4 E *ull organi8ed infrastructure in place Manufacturing facilities perceived as a benchmar- in 'ndia .omplete range of VRLA batteries" Proven field performance in all user segments Approved vendor status in major user segments"

ARBL FUTURE LANS: 2 Ma%imi8e e%port of its batteries" B 3 F 5 $merge itself as a global player .onstant up gradation of its products (tream of new models .onstant (tress of improving productivity"

AMARA RAJA GROU COM RISES OF FOLLOWING COM ANIES: 2 Amara Raja ,atteries Limited )AR,L+ Iara-ambadi #irupathi" B Amara Raja power (ystems Pvt" Ltd )ARP(L+ Iara-ambadi and #irupathi" 3 F 5 4 @arsha $lectronics Pvt" Ltd )@$PL+ Iara-ambadi #irupathi Mangal $lectro (ystems Pvt" Ltd )M$(PL+ Petamitta .hittoor ?ist" Amara Raja $lectronics Pvt" Ltd )AR$PL+ ?ighavamagham .hittoor ?ist =alla *oods ! (pices Pvt"Ltd"

AMARA RAJA BATTERIES LIMITED: Amara Raja ,atteries Limited was established in the year 2CD5 and then converted into limited in the year 2CC6" Amara Raja has a strategic tie&up with 1ohnson .ontrols 'nc" of the <(A" Amara Raja has demonstrated its commitment to offer optimum system solutions of the highest 0uality and has become the largest supplier of standby power systems to core 'ndian utilities such as the 'ndian Railways ?epartment of #elecommunications $lectricity ,oards and major power generation companies" $%tensive plans have been charted out the future where in the company underta-es to become the most preferred supplier for power bac-&up systems" Amara Raja has offered time tested world&class technology and processes developed on 'nternational (tandards J be it high integrity VRLA systems li-e PO7R (#A.I and PO7$R PL<( or the recently launched high performance <P( battery J IOM,A# ! AMARON @' J L'*$ automotive batteries that are the products of the collaborative batteries efforts of engineers at 1ohnson .ontrols 'nc" and Amara Raja" AR,L comprises of two major divisions vi8" 2L 'ndustrial ,attery ?ivision" BL Automotive ,attery ?ivision"

INDUSTRIAL BATTERY DI"ISION #IBD$: Amara Raja has become the benchmar- in the manufacture of 'ndustrial batteries" 'ndia is one of the largest and fastest growing mar-ets for industrial batteries in the world and Amara Raja is leading in the front with an D6G mar-et share for standby VRLA batteries" 't is also having the facility for producing plastic components re0uired for 'ndustrial batteries" AR,L is the first company in 'ndia to manufacture VRLA batteries )("M"*+" #he company has set&up Rs"2CB6 la-hs plant in 2D acres in Iara-ambadi Village Renigunta Mandal" #he Project site is notified under 9,; category" %APA%ITY: #he actual installed capacity of ',? is F la-hs cells per annum and utili8ation capacity is reached to 3 B5 666 cells per annum" PRODU%TS: #ypes of VRLA batteries manufactured in ',? areL 2L PO7$R (#A.I BL IOM,A# )<P( battery+ 3L ,R<#$ FL =$NPRO" %USTOMERS: Amara Raja being the first entrant in this industry has the privilege of pioneering VRLA technology in 'ndia" Amara Raja has established itself as a reliable supplier of high J 0uality products to major segments li-e #$L$.OM RA'L7A>( and PO7$R ($.#OR("

%OMPETITORS: #he Major competitors for Amara Raja ,atteries Products areL 2L $%ide 'ndustries Ltd" BL @yderabad ,atteries Ltd" 3L =N, 'ndustries )<( based+" FL Prestolite 'ndustries" 5L AM.O 'ndustries" AUTOMOTI"E BATTERY DI"ISION #ABD$: AR,L has inaugurated its new automotive plant at Iara-ambadi in #irupathi on (eptember BFth B662" #his plant is part of the most completely integrated battery manufacturing facility in 'ndia with all critical components including plastics sourced in&house from e%isting facilities on&site" 'n this project Amara Raja:s strategic alliance partners 1ohnson .ontrols <(A have closely wor-ed their 'ndian counterparts to plant engineering" 't is also having the facility for producing plastic components re0uired for automotive batteries" %APA%ITY: 7ith an e%isting production capacity of 5 la-hs units of automotive batteries the new =reenfield plant will now be able to produce 2 million batteries per annum" #his is the first phase in the enhancement of Amara Raja:s production capacity in which the company has invested Rs"F5 crores" 'n the ne%t phase at an additional cost of Rs"B5 crores production capacity will increase to B million units estimated to complete around 3 years" After that AR,L will become the single largest facility for battery manufacture in Asia"

PRODU%TS: #he Products of A,? areL 2L Amaron @'&7A> )#R<.I(+ BL Amaron @ARV$(# )#RA.#OR(+ 3L Amaron (@'$L? )'NV$R#$R(+ FL Amaron @'=@&L'*$ )PA(($N=$R .AR(+ #he plastic products of A,? are 1ars and 1ar .overs" %USTOMERS: AR,L has prestigious O$M )Original $0uipment Manufacturer+ clients li-e *OR? =$NRAL MO#OR( M$R.$?$( ,$NA MAR<#' <?>O= L#?" PR$M'$R A<#O L$>LAN? A(@OI L$>LAN? @'N?<(#AN MO#OR( #$L.O MA@'N?RA ! MA@'N?RA and (7ARA1 MAA?A ?A$7OO MO#OR(" %OMPETITORS: #he following were the competitors for Amara Raja ,atteriesL 2L $%ide 'ndustries" BL Prestolite 3L =N, 'ndustries )<( ,ased+ FL AM.O 5L @yderabad ,atteries Ltd"

AMARA RAJA OWER S!STEMS "T# LTD.: Amara Raja Power (ystems Pvt" Ltd" 7as incorporated in 2CDF and was co&promoted by AP $L$.#RON'. ?$V$LOPM$N# .ORPORA#'ON )AP$?.+" ,y virtues of AP$?.:s e0uity participation ARP(L has become a deemed public limited company as per section F3 )A+ of the companies Act 2C54" ARP(L is engaged in the manufacture of <ninterrupted Power (ystems )<P(+ ,attery chargers ),.+ and inverters" #he company has entered into a new collaboration with MMs" Rectifier #echnologies Australia for manufacturing the advanced switch Mode Power (upply units )(MP(+ for battery charging purpose" #he present credit rating of the company is 9A;" #otal strength of ARP( )P+ L comes around B45" PRODU%TS: #he products of ARP(L areL 2L .onventional .harges" BL (witch Mode Rectifiers )(MR+ 3L 'ntegrated Power (upply (ystems )'P(+" %USTOMERS: ,(NL V(NL (P.NL ('$M$N( R$L'AN.$ AN? L=" &ARS&A ELE%TRONI%S PRI"ATE LIMITED #&EPL$: 't was incorporated in 2CC6 for manufacture of M( cabinets #rays and Rac-s for batteries <P( ,attery .hargers 'nverters etc" and to manufacture small battery parts" 't was registered as an ancillary unit to AR,L ! ARP(L" #he operations of the company are brisand satisfactory"

't is having all the sheet metal processing machinery starting from sheet fitting to final painting with punching bending phosphate and powder coating process and total strength of @$PL comes around 2C3"

PRODU%TS: M( J .A,'N$# #RA>( AN? RA.I(" %USTOMERS : AR,L A%P!L. T$%&u' ($th Johnson Controls )or T%*hnolo+, %-+%: AR,L has a #echnological and *inancial alliance with 1ohnson .ontrols 'nc" )1.'+ <(A for the Automotive ,attery )(L'+ Project" 't raised R(" B56 millions through preferential e0uity issue ceding a B3"EG sta-e to 1.' at R( DC M share in *> CD" 1.' can increase this share till 36G" E.*%ll%nt Wor/$n+ C0'$t0l M0n0+%1%nt: (ince AR,L:s scales have primarily to the Public (ector which has the reputation of being of slow in paying its dues" ?espite that AR,L has been able to manage its wor-ing capital very well" 'ts wor-ing capital as a percentage to sales has reduced drastically from F2"4G in financial year HCF to 23"EG by financial year HCC" ?ebtors have reduced from 22D days in financial yearHCF to 4F days in financial yearHCC" 't has utili8ed internal cash generations to e%tract better discounts on it:s purchased by paying creditors earlier than is normal" #hat is reflected in the current liabilities reducing from 43 days to FB days currently" H$+h%r M0r+$ns -u% to In&hous% ro-u*t$on: AR,L has invested its surplus cash to build capabilities to manufacture several of its components in&house to enhance the 0uality of battery components" 't manufactures everything in&houseL from o%ideMgrids to cabinets and rac-s" 't also produces transformers and all sub&systems for power systems within its own facility" As a result its margins have been inching upwards over the last three years )from BE"2G in *y C4 to 36"D5G in *> CC+ despite a sharp fall in reali8ations over the same time frame" @owever we e%pect this increase in margins to be capped as competition intensifies" ,ut Operating margins will be affected when AR,L ma-es forays into automotive batteries where margins are inherently lower than the 'ndustrial batteries segment" After *> 66 for AR,L it is a Volume game to drive growth"

A *0ut$ous '0,out str0t%+,: AR,L:s payout has been conservative over the last few years mainly on account of its intention to repay loans first and ma-e itself debt&free" Now that it has achieved that objective we e%pect payouts to become more liberal which will help improve valuations" E.%*ut$2% Su110r, Con*lus$on: ,elieve that the competition puts pressure on margins/ being a pioneer of VRLA ,atteries still AR,L can retain its mar-et share" ,esides AR,L has done bac-ward 'ntegration to ensure 0uality and lower cost of operations" @ope these steps will help AR,L for consistent growth and mar-et sustainability
!01T !T%.N#2T!

Maintenance *ree

NLong Lasting NPromotion ! ,randing N@eat Resistant ! Low Reaction N(trong distribution 7$AIN$((
Less experienced in Automotive Battery Market
1PP1%T3N4T4.!

Attracting customers of O$M mar-et

N'ncreasing brand awareness through retailers #@R$A#(

.ompetition from unorgani8ed sector

N$%ide may also come up with competitive product

Promotion
.ampaign

J 9Lasts Long Really Long;

Ad

won =old Abby at Mumbai

@inglish

Lyrics to ma-e brand youthful ! sporty

*ables

and animated characters

Mineral

7ater campaign during summer in various cities

(ponsored

=o&-arting ! Motor sports

Narain

Iarthi-eyan J ,rand Ambassador

Business Units
ARBL has two strategic business units (SBUs): 1. The Industrial batteries division and . The Auto!otive batteries division "rior to ##1$# % the co!&an' didn(t have an' &resence in the auto!otive s&ace and was thus susce&tible to the vagaries o) the de!and in the industrial sector% &ri!aril' teleco!. Reali*ing the &otential o) auto!otive batteries s&ace and the need to diversi)' in order to achieve stabilit'% ARBL ro&ed in +,I )or the !anu)acturing o) auto!otive batteries. The auto!otive batteries business unit co!!enced o&erations in ##1 with technolog' )ro! +,I. Since the co!!ence!ent o) auto!otive batteries unit% ARBL has achieved stabilit' and consistenc' in growth as auto!otive s&ace is relativel' !ore stable with buo'ant a)ter!ar-et de!and. .ithin 11 'ears% the revenue !i/ between the two units has changed )ro! 1##:# to a&&ro/i!atel' 01:23 at the end o) 45 11. In case the de!and )ro! the teleco! s&ace re!ains subdued (discussed later) )or an e/tended &eriod% it is ver' li-el' that the auto!otive batter' division !a' !a-e u& )or a greater &ro&ortion o) the revenue !i/ in the 'ears ahead. At the !o!ent the a&&ro/i!ate revenue contribution )ro! each division is as )ollows:
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As can be observed above% ARBL has )airl' diversi)ied revenue strea!s and not overde&endent on an' one &articular sector. The sa!e is ver' i!&ortant because both auto!otive and teleco! in &articular have had their share o) u&s and downs and thus over$reliance on an' one sector can lead to volatilit' in the earnings o) ARBL% as was the case till earl' ### when the co!&an' was solel' de&endent on industrial batteries division. Automotive batteries division: Brand Equity: .e believe% the auto!otive batter' industr' co!!ands high degree o) branding &ower on account o) being duo&ol' in nature with to& two &la'ers( vi*. 6/ide and A!ara Ra7a controlling 89#: o) the organi*ed !ar-et. A!ongst all the co!&onents in the auto!obile% batter' &robabl' co!!ands the highest degree o) branding &ower and its either A;AR<= or 6/ide that is &re)erred b' both <6;s and a)ter !ar-et custo!ers. Competitive Advantages for ARBL: Advanced technolog' and the wide distribution networ- are the two !a7or co!&etitive advantages that have hel&ed ARBL thwart co!&etition and !a-e in$roads in an industr' that was solel' do!inated b' 6/ide.
Automotive Batteries (53% !ndustria" Batteries (#$%

ARBL
<6; (32:) Re&lace!ent (>2:) Teleco! (02:)

U"S (3?:) Railwa' @ <thers (11:)

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4urther% now that the co!&an' has established itsel) as a well$-nown brand% it itsel) acts as a sustainable !oat and creates a vicious circle )or the co!&an' to outgrow co!&etition. %e&tor detai"s and mar'et s(are: At ;ar(11% the si*e o) the Indian lead acid auto!otive storage batter' was esti!ated at ?% ## crores. It can )urther be classi)ied into <6; @ A)ter!ar-et% and Branded and Unbranded. Ae!and )or auto!otive batteries is divided a!ong di))erent seg!ents% with cars and utilit' vehicles constituting the largest share o) 3>:% )ollowed b' co!!ercial vehicles at about ?:% $wheelers at about 1: and tractors at 12:. At the <6; level% 6/ide and A;AR<= are the onl' two &re)erred brands and at the !o!ent there(s no sco&e )or unorgani*ed &la'ers. In the 0. <6; seg!ent% ARBL co!!ands 2: !ar-et share% while its strong association with <6;s and wide distribution networ- has re&ortedl' hel&ed the co!&an' &enetrate re&lace!ent !ar-et seg!ent where it holds 3#: !ar-et share in the 0. organi*ed seg!ent and overall 1?:. Sales to <6;s are )ro! organi*ed seg!ent% while the unbrandedBunorgani*ed &la'ers% who sell low$cost &roducts )or two$wheelers% co!!ercial vehicles and tractors still account )or 82#: o) the total sales in the a)ter!ar-et. Cowever% there lies a good o&&ortunit' )or ARBL (as &ri!aril' )ocused on re&lace!ent !ar-et) as the share o) unorgani*ed !anu)acturers has been in a downtrend in recent 'ears owing to &roduct unreliabilit'% rising dis&osable inco!es% increasing Dualit' consciousness% environ!ental restrictions% and technolog' advance!ents in the auto!otive industr'.
Automotive battery mar'et ()*+,, &r<6; ( %#2# cr.) A)ter!ar-et (>%12# cr.)

Automotive battery mar'et ()*+,, &rBrandedB<rgani*ed (0%12# cr.) Unbranded (3%02# cr.)

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Automobi"e se&tor gro.t(: Auto!otive batteries sales growth is directl' &ro&ortional to the growth in new vehicle roll$out each 'ear. Roll$out o) new vehicles in an' 'ear contributes directl' to the <6; sales in the )irst 'ear% while it also adds to the re&lace!ent de!and over a recurring c'cle o) 3 'ears. The <6; business is driven b' )resh vehicle (0$wheelers and $wheelers) de!and in an' &articular 'ear. A)ter!ar-et sales are in)luenced b' the nu!ber o) vehicles in use% average batter' li)e% average vehicle age and &o&ulation growth. <n an average% a 0$wheeler batter' li)e e/&ectanc' is about three 'ears% while $wheeler batter' li)e e/&ectanc' is around two 'ears. The auto!obile ( . E 0.) sector saw a 9: volu!e ,AFR over )ive 'ears ( ##2$#> to

##9$1#)% while 0$wheeler <6; sales grew about 13: ,AFR between ##2$#> and ##9$1#. Though <6; sales have slowed down since the last 1 'ear on account o) various !icro and !acro econo!ic )actors% in the longer run the twin )actors o) increasing a))ordabilit' and low &enetration are e/&ected to hel& sustain double digit growth )or the ne/t 2 'ears in India(s auto!obile de!and.
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5es a))ordabilit' has i!&roved several )olds on account o) various below !entioned reasons and is one o) the -e' reasons driving auto!obile de!and in India. O Rising &ros&erit' O 4avorable de!ogra&hics with a &redicted increase in wor-ing$age &o&ulation O 6asier access to )inance O Frowing co!&etition with continuousl' i!&roving &rice$value &ro&osition )or custo!ers The average salar' o) !iddle inco!e grou& has increased substantiall' over the 'ears while the advance!ent in technolog' has enabled the co!&anies &rovide an i!&roved &roduct at a cost !arginall' higher that what the' used to Duote several 'ears bac- and thus bu'ing $0 wheelers is within the reach o) larger share o) &o&ulation in India. Strong re&lace!ent !ar-et is another &ositive )or batter' !anu)acturers. ,onsider this% at the end o) 45 #3% there were >.1 crore registered vehicles in India while the nu!ber o) registered vehicles are e/&ected to have crossed a !ar- o) 13.2 crore at the end o) 45 1 .
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Since the average li)e s&an o) batter' ranges )ro! $0 'ears and since the batter' re&lace!ent decision cannot be de)erred% co!&anies li-e A!ara Ra7a are e/&ected to bene)it i!!ensel' )ro! the ever increasing nu!ber o) registered vehicles on the Indian roads. 4urther% it is i!&ortant to note here that re&lace!ent !ar-et has !uch better !argins in co!&arison to sales to <6;s and is relativel' insulated )ro! interest rate c'cles. As &er the recent re&ort b' I,I,I% the' esti!ate overall auto!otive batter' de!and to increase at a ,AFR o) 81>.0: over 4511$106 and touch 8>3 !illion units. The <6; de!and is e/&ected to be 8 > !illion units while the re&lace!ent de!and has been esti!ated at 831 !illion units b' 4510. The' e/&ect do!estic auto sales to re!ain structurall' robust and witness 813.2: ,AFR during 4511$106.
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/ri&ing po.er: Being a renowned brand in a sector do!inated b' onl' two &la'ers controlling 9#: !ar-et share% lends &ricing &ower to the co!&an'. There)ore% in the auto!otive batter' s&ace% A!ara Ra7a is able to &ass on the rise in in&ut costs% &ri!aril' lead% in the re&lace!ent !ar-et. .ith <6;s% it has a 0"ead pass t(roug( agreement1. These contracts are lin-ed to L;6 &rices% such that a rise in cost o) &roduction due to lead is &assed on to <6;s with a lag o) 3 !onths. Capa&ity e2pansion: In order to sta' ahead o) de!and and gain access to larger !ar-et share in both <6; and re&lace!ent !ar-et% the co!&an' has been 7udiciousl' e/&anding its ca&acit'. Auring 45 1 % in the auto!otive batter' s&ace the co!&an' enhanced its 0$wheeler and $ wheeler batter' ca&acities to 2.># !illion units &er annu! (0. !illion units &.a. at the end o) 45 11) and 0.?# !illion units &er annu! (3.> !illion units &.a. at the end o) 45 11) res&ectivel'.

4or 45 13% the !anage!ent has alread' guided )or enhancing the ca&acit' o) 0$wheeler batteries to >.# !illion units &er annu!.
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!ndustria" batteries division: ARBL started with industrial batter' business in 1991$9 and was the )irst co!&an' to introduce GRLA batter' technolog' in India. Basicall'% the co!&an' could seal its &lace in the India !ar-et on account o) its vastl' i!&roved &roduct line and still continues to do!inate the !ar-et. The co!&an' caters to the reDuire!ents o) teleco!% U"S bac-$u& s'ste!s% railwa's% solar &ower and &ower utilit' sectors. In the teleco! sector% the batteries su&&ort switches and trans!ission (wire line and wireless) networ-sH the Indian Railwa's use batteries in coach air$conditioningH the batteries also su&&ort the trans!ission and distribution networ-s o) &ower stations. The U"S batteries su&&ort IT and IT6S o&erations as &art o) U"S s'ste!s that regulate &ower su&&l' to critical eDui&!ent during voltage )luctuations. In the teleco! s&ace% its -e' custo!ers include Indus towers% Bharti Airtel% FTL% GI<; networ-s% Tower vision% etc. 4urther% Bharti Airel has chosen to &artner with ARBL as its &re)erred vendor )or A)rica networ- e/&ansion &rogra!s. Though sales to Indian Railwa's constitute a s!all &ortion o) the overall industrial batteries business% ARBLs &roducts are used in !ore than 0#: o) II and III tier airwww.
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conditioned coachesH the' also su&&ort train lighting% and signaling and teleco! (S@T) &ower su&&l' solutions (Source: Company) In the !ediu! GRLA seg!ent )or co!!ercial U"S a&&lications (BI4S sector% Fovern!ent sector% ITBIT6S% etc) the co!&an' en7o's long$ter! su&&lier relationshi& with national <6;s such as 6!erson% =u!eric% Aelta% AB "ower% Tritronics and Uniline. 3e"e&om battery business: Though ARBL continues to be the &re)erred vendor to all the !a7or teleco! in)rastructure and service &roviders% the last 'ears have been tough on the teleco! batter' division with signi)icant &ressure on &ricing during the last Duarters o) 45 11. Since then the &rices in the teleco! batter' s&ace have botto!ed out and the custo!ers are now negotiating directl' with the &re)erred vendors as against the &reviousl' )ollowed nor! o) reverse auction !echanis!% where the lowest bidder used to get the orders. Cere again ARBL is being &re)erred on account o) its technologicall' advanced &roduct line. As )ar as growth in the teleco! batter' s&ace is concerned% the !anage!ent is ho&e)ul o) !aintaining low double$digit volu!e growth against e/&ected industr' growth o) >$?: on account o) its &re)erred vendor status with !ost o) the service &roviders and tower co!&anies% networ- e/&ansion in A)rica (co!&arativel' !uch higher !ar-et share in A)rica) and i!&ending re&lace!ent de!and. Cowever% to account )or an' un)oreseen slowdown% the co!&an' has been wor-ing on wa's to !a-e Large GRLA ca&acit' !ore )le/ible so that it can cater to seg!ents other than teleco! and thus !a/i!i*e ca&acit' utili*ation. U/% battery business: Aes&ite slowdown in teleco! batter' business% ARBL has been able to sustain 812$ #: volu!e growth in industrial batter' division on account o) robust de!and )or U"S batteries.
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"lagued b' the &erennial &roble! o) &ower de)icit% &ower bac-u& !ar-et in India is

growing at an annual rate o) 12$ #: var'ing within the )our di))erent seg!ents na!el' generators% U"S% inverters and batteries. 6/tensive co!&uteri*ation o) ban-ing and govern!ent de&art!ents% robust growth o) ITBIT6S sector in India% ra&idl' e/&anding AT; networ- and &ersistent &ower shortage is e/&ected to hel& sustain 12: annuali*ed growth )or U"S batteries during the ne/t )ive 'ears. In U"S batter' business% ARBL has been able to build a brand out o) its IJUA=TAK batteries and thus leads ;ediu! GRLA ()or co!!ercial U"S a&&lications) &roduct seg!ent with 83 : !ar-et share. The de!and )or co!&an'(s batteries has been ver' robust and there)ore ARBL has been consistentl' achieving 9#$92: ca&acit' utili*ation on e/&anding ca&acit' base. As &er the !anage!ent% !ore than 3#: o) the current !ar-et reDuire!ent is still !et b' i!&orts )ro! ,hina and South 6ast Asian countriesH however their share is ra&idl' declining on account o) in)erior Dualit' and lac- o) a)ter sales service. Thus% besides a gradual e/&ansion in !ar-et si*e% declining share o) unorgani*ed &la'ers lends )orward a huge o&&ortunit' )or co!&anies such as ARBL to consistentl' grow at 1?$ #: and out&ace industr' growth rate