Amara Raja Q1 profit rises 16%; new energy business shows signs of improvement

Automotive battery maker Amara Raja Energy & Mobility reported a 15.8% year-on-year rise in consolidated net profit to ₹191 crore for the June quarter, compared with ₹165 crore a year ago.

Consolidated revenue from operations rose 24% to ₹4,214.5 crore from ₹3,401 crore in the corresponding quarter last year, according to the company’s exchange filing.

EBITDA increased 11.7% to ₹405.9 crore from ₹363.5 crore a year earlier. However, the EBITDA margin narrowed to 9.6% from 10.7%.

The lead-acid batteries and allied products business remained the company’s main revenue contributor, with segment revenue rising to ₹4,005.24 crore from ₹3,279.79 crore in the year-ago quarter. Revenue from the new energy business also increased to ₹209.30 crore from ₹121.29 crore.

At the segment-results level, the lead-acid batteries and allied products business reported ₹269.60 crore, up from ₹253 crore a year earlier. The new energy business, meanwhile, narrowed its loss to ₹22.05 crore from ₹35.20 crore in the corresponding quarter.

Amara Raja also invested about ₹150 crore during the quarter in Amara Raja Advanced Cell Technologies Pvt Ltd (ARACT), its wholly owned subsidiary, through an investment in equity shares to meet its capital requirements. The investment takes the company’s total investment in ARACT to about ₹1,650.01 crore.

Post-earnings, shares of Amara Raja Energy & Mobility Ltd were trading at ₹905.90, down ₹26.25, or 2.82%, on the BSE as of 2:22 pm.

Amara Raja’s EV battery cell strategy

Last month, Amara Raja said it did not expect its first Made-in-India EV battery cells to match Chinese prices initially, but believes customers may be willing to pay a premium as localisation requirements tighten and demand for domestic products grows.

Vikram Gourineni, Executive Director at Amara Raja, said the company is launching its first 2170 cylindrical cell, primarily designed for electric two-wheelers, with potential applications in drones and power tools. Several EV manufacturers are evaluating the cells, although the company expects customer adoption to take time.

Gourineni said the company would not be cost-competitive with China from day one, but believes there is a premium some customers are willing to pay for products made in India, alongside the possibility of further localisation requirements from the government.

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