Atlas Battery Ltd. (ATBA) held an analyst briefing earlier today to discuss FY24 financial results and its future outlook.
The following are the key highlights:
- The company posted a topline of PkR41.5bn in FY24 vs. PkR41.9bn in FY23, a marginal decrease of 1% YoY. Management attributed the drop in revenue to a 10% reduction in market size, which resulted in lower sales.
- Gross margins for FY24 were 14.3%, compared to 15.4% in FY23. From now on, management expects margins to stay under pressure due to inflation, rising energy costs, and the unavailability of gas during winter. This situation may necessitate the use of LPG.
- Industry volumes during FY24 stood at 10mn, with the company achieving a market share of approximately 24%.
- Management attributed a 35-40% share of the sales mix to storage batteries, with the remaining attributed to automobiles and motorcycles.
- The management indicated that a study phase is underway for the lithium-ion batteries, after which they will decide.
- Management anticipates that higher prices of lithium-ion batteries may limit demand over the next 2-3 years. Hence, weak purchasing power and inflationary pressures could cause lithium-ion batteries to remain a niche market during this time.
- The company recently launched four new batteries in the MF Series, including three for automobiles and one for motorcycles. All of these have received a positive response, and management is observing a swift transition to the MF Series in the auto segment.
- ‘Lead’ accounts for 65-70% of the total production costs. The company utilizes both local and imported lead based on price fluctuations.
- The company holds approximately 20% of the market share in the auto industry, while in the two-wheeler market, it commands a market share of 42-43%.
- The scrip is not in our formal coverage.
Courtesy – AKD Research