Amara Raja Batteries

Added Amara Raja Batteries 300 units (Contract notes attached) and this is more like a switch from Ashok Leyland that I sold on 27th of June but this is more of an investment I had planned even before booking out of Ashok Leyland.

This is not a stock recommendation and just sharing the information that is available in the public domain.

I selected Amara Raja Batteries because it passes all the points (details of the point on shabbir.in here and here) that I look for in any company.

Auto sector is booming because there are huge plans coming up of Electric Vehicles and India is also making it's move towards the EVs.

So I was doing my research and I researched many battery companies like Indo national, Everest Industries as well as Exide Industries. Indo national, Everest Industries couldn't keep up the pace with alkaline batteries and found it hard to compete with Energizer and Dura Cell. So not sure if they can re-invent themselves for the next surge in batteries.

Exide Industries was my choice but they have a big diversification to Insurance business and 25% of their income is from Insurance business.

So we were left with only one choice as Amara Raja Batteries which is purely a automotive and Industrial battery player with good market share.

I saw the stock was coming down from 1100+ levels and it was because there is some pressure on business due to increase in lead prices. I think 800ish levels is good enough for me to buy and so went ahead and invested more than what I booked out of Ashok Leyland.

 

Motherson and Exide are awesome companies. Don't track Rico auto but it looks like they have problem in increasing the topline and they have sales going down for quite sometime now.

 

The report by Motilal Oswal is worth reading. It is expanding to as e-rickshaws batteries.

 

On the BSE website. Always.

 

Added 100 more of Amara Raja to my portfolio. Contract notes attached.

 

Actually my initial purchase was at 854 and so technically it is average down but then I prefer to be buying in the leg up because that gives me the confidence of bottom is in place for the stock. You can read about it here https://shabbir.in/average-up-or-average-down/

The idea is simple, I don't want to be the first mover and buy the dip. I buy much later and after the dip and often in the leg up so it is actually not averaging down and often after a key hurdle is crossed so my wait time is also not very long.

 

Avantifeed has good business and earnings going forward but it has runup too much as well. 5 Times in last 1 year and so I am cautious for it. I like Waterbase more than Avanti because it has much valuation gap to fill and both are in the same business.

GMDC I tend to avoid PSU and don't believe the companies operate to the full potentials to be investing in them.

 

Force motors there isn't any rally as yet but for Divis Lab there were import alert that aren't anymore but the price at which I entered was too much beaten down and at that price, even if the complete US biz goes off, the valuations were cheap. Similarly for Amara Raja, there isn't a single reason why the stock should correct 30% but it did on the back of the expectation that lead prices world wide is on the rise and will impact the margin but that wasn't the case.

 

That is what is explained in my eBook about DIY technical analysis. Time to go through it once again. There are chart pattern where you buy the breakout or in the leg up.