Atlas Battery Ltd. (ATBA) held its analyst briefing today to update investors on their FY23 results and provide insights into the company’s future outlook. To note, in FY23, the company reported earnings of PkR2.2bn (EPS PkR63), a substantial increase from PAT of PkR0.7bn (EPS PkR20) in the previous year.
· The remarkable growth in earnings is primarily attributed to an expansion in volumetric sales and a notable increase of over 50% in product prices throughout the past year.
· A significant portion of ATBA’s revenue, around 90-95%, is derived from the replacement market, with the remaining coming from OEMs. In terms of customer distribution, 55-60% of sales cater to UPS and solar, while the rest is dedicated to the automotive sector.
· The notable rise in last year’s inventory is linked to the escalation in raw material costs and an increase in imported raw material inventory holding period from 2-3 months to 4-6 months as a precaution against import restrictions.
· Of the total raw materials, approximately 85% are locally sourced, with the remaining 15% imported. “Lead,” a crucial raw material, is predominantly procured locally. However, local lead prices are influenced by international commodity price volatility and exchange rate fluctuations.
· ATBA maintains its focus on solar-compatible batteries and endeavors to adhere to international standards to minimize wastage and claims.
· Over the past year, the company introduced five new batteries, comprising two for automotive use and three for bikes. Moreover, ATBA boasts a comprehensive range of maintenance-free batteries for local vehicles, spanning from 660cc to 3,500cc.
· The company is dedicated to becoming a market leader by emphasizing volume growth and establishing a nationwide exclusive network. As of now, ATBA holds the second position in terms of market share, trailing “Osaka”.
Courtesy- AKD Research