Amara Raja Batteries (NSE:AMARAJABAT) is the second-largest battery company in India with exposure to several vertical markets, such as telecommunications and automobiles. The company has managed to consistently grow by taking market share and by increasing sales to the aftermarket segment as India’s economy develops. Amara Raja has a 15-year relationship with U.S.-based Johnson Controls,‡ which supplies technology support and expertise. This gives Amara Raja Batteries a competitive advantage as it has developed a premium brand, which is especially helpful in the trade channel as it filters down to the consumer level and drives replacement volumes. Aftermarket sales constitute a higher-margin segment, further boosting profitability. The company should get an additional tailwind from the infrastructure and capital spending that we expect to occur in India in coming years.
From Wasatch International Growth (Trades, Portfolio) Fund Q4 2014 Commentary.
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