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Amara Raja Batteries: Buy

The strong demand from the auto replacement side and the pick-up in industrial battery sales are positives for the company.
September 22, 2012: A robust replacement market for automotive batteries and improved industrial battery sales have put Amara Raja Batteries (ARBL) in a sweet spot. Investors with a perspective of at least one year can buy the stock. The company derives about 60 per cent of its revenues from the auto segment, where it counts Ford, Maruti, Hyundai, Honda, Mahindra & Mahindra, Tata Motors, and Tafe among its clients. The industrial division, in which the company primarily makes telecom and UPS batteries, brings in the rest of the revenues. At the current market price of Rs 401, the stock trades at a price to earnings ratio of about 12.5 times its estimated earnings for 2012-13. This is at a justifiable discount to the bigger peer Exide Industries, which trades at 20 times estimated FY13 earnings. While the stock has moved up by about 82 per cent since our pr…

Sebi proposes no-frills demat account for small investors

NEW DELHI: With an aim to encourage an investment culture in the country, market regulatorSebi today announced no-frills or basic trading accounts for retail individual investors with no charges applicable for holdings up to Rs 50,000.

The investors can hold securities worth up to Rs two lakh in these no-frills accounts, to be called Basic Services Demat Account (BSDA), but the charges would be capped at a maximum of Rs 100 a year for funds exceeding Rs 50,000.

There will be no Annual Maintenance Charges if the value of holding in these accounts is up to Rs 50,000, Sebi said in a circular.

The move follows a facility of no-frills savings account already in place at various banks as per directions of the banking sector regulator RBI ( Reserve Bank of India).

Investors can hold stocks, mutual funds and other securities in these accounts and Sebi has asked the depositories to facilitate opening of such accounts with effect from October 1, 2012.

Sebi said that investors would get …