Shares of Amara Raja Batteries are soaring to new highs. Know why

Shares of Amara Raja Batteries struck a fresh high on Dalal Street today as traders bet a sharp fall in commodity prices will lead to better earnings at the battery maker owing to cheaper input costs.

Amara Raja Futures, too, were prominent in the upper quartile of the top gainers list in the derivatives space. They rose 55.75 rupees, or 6.3 percent, to 937 rupees on the National Stock Exchange. Amara Raja Futures' Open Interest saw the highest positive change of 30 percent over Friday, indicating the setting up of fresh long positions on the counter. Their volumes too surged 1,100 percent to nearly 3,000 contracts.

The stock was in heavy demand in the cash market as well with 8.52 lakh shares changing hands on the NSE by 1 pm, compared with a 5-day average of 1.72 lakh shares.

Amara Raja has seen its market capitalisation soar 94 percent to 15,460 crore rupees as an auto boom in the country pushed up demand for car and two-wheeler batteries while a nationwide shortage of power resulted in a sharp rise in the demand for invertor batteries.

image credit: Indiatimes