Amara Raja Energy
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Amara Raja Energy & Mobility (ARE&M) is navigating a pivotal transition, balancing its established lead-acid battery business with substantial investments in new energy solutions, particularly lithium-ion technology and battery energy storage systems (BESS). Management's commentary highlights a strong long-term outlook driven by robust demand in automotive and industrial sectors, yet acknowledges near-term profitability challenges due to rising input costs and operational expenses. Vista's financial outlook reflects an expectation of accelerating revenue growth, supported by the strategic commissioning of a 2GWh cell plant and a 10GWh BESS facility, which are critical to capturing the burgeoning market for renewable energy storage. While margins are projected to remain stable, the company faces execution risks and potential dilution from the low-margin nature of new energy products. The industry context, characterized by expanding domestic manufacturing and improving pricing power, further supports ARE&M's growth trajectory. Over the next 12-24 months, key opportunities include scaling production capabilities and leveraging government support for localization, while watchpoints include commodity price volatility and the competitive landscape in the EV sector
Why We Like This Stock
- Strong demand in automotive and industrial segments supports revenue growth
- Strategic investments in lithium-ion technology and BESS are expected to enhance market positioning
- Improving pricing power within the industry may bolster profitability
Things To Watch Out For
- Near-term profitability is constrained by rising input costs and operational expenses
- Execution risks associated with scaling new energy manufacturing capabilities
- Potential dilution of margins from the low-margin nature of new energy products
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 11,708 | 12,846 | 13,814 | 15,446 | 17,592 |
| Profit Before Tax (Cr.) | 1,229 | 1,137 | 952 | 893 | 1,153 |
| PBT Margin | 10.5% | 8.9% | 689.2% | 5.8% | 6.6% |
| Net Profit (Cr.) | 910 | 857 | 699 | 653 | 843 |
| Earnings Per Share | 49.7 | 46.8 | 38.2 | 35.7 | 46.1 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Anand Rathi | ► Neutral | 1,080 | 13-Aug-2026 |
| JPMorgan | ► Neutral | 1,070 | 12-Aug-2026 |
| Morgan Stanley | ▼ Underweight | 875 | 26-May-2026 |
| Motilal Oswal | ► Neutral | 944 | 12-Aug-2026 |
| Nomura | ► Neutral | 1,048 | 12-Aug-2026 |
Company Overview
Show Company Profile
Amara Raja Energy & Mobility Limited, together with its subsidiaries, manufactures and sells lead-acid storage batteries for industrial and automotive applications in India and internationally. It operates in two segments, Lead Acid and Allied Products, and Others. The company provides new energy business related products; installation, commissioning, and maintenance services; and industrial chargers, integrated power systems for Indian Railways, electric vehicle chargers for 2W, 3W, 4W, and bus segment applications, as well as battery energy storage systems. It also develops, manufactures, and sells energy storage and management products, solutions, and technologies related to lithium cells, advanced cell chemistries, battery packs, and components. The company sells its batteries under the Amaron, PowerZone, Power Stack, AmaronVolt, Amaron Brute, Amaron Sleek, Amaron Elito, and Quanta brands. It exports its products to various countries in the Indian Ocean Rim. The company supplies its batteries to various customer groups, such as telecom, railways, solar, motive, power control, international operations, defence, and UPS; and automobile original equipment manufacturers, replacement markets, and private label customers. The company was formerly known as Amara Raja Batteries Limited and changed its name to Amara Raja Energy & Mobility Limited in September 2023. Amara Raja Energy & Mobility Limited was incorporated in 1985 and is based in Hyderabad, India.