Amara Raja Management Meet: Lead-Acid Margins Improve, Li-ion Investments Scale Up; Neutral Rating Maintained

Amara Raja’s management highlighted strong developments across its businesses. In the lead-acid segment, original equipment (OE) demand has risen post-GST cuts, though replacement demand remains muted. Lead costs are stable QoQ, while the tubular battery plant can lift segment margins by 300–400bps. The recycling unit is expected to trim costs by 30–40bps, though elevated power costs may persist for another quarter. In the new energy (Li-ion) business, Amara Raja has committed ₹25b towards its first 2GWh gigafactory, R&D unit, and qualification plant, with ₹12b already invested and the balance to be deployed within 12 months. The total 16GWh capacity project cost is pegged at ₹60–70b, with future funding avenues under evaluation. At ~10GWh scale, the business could deliver 10–11% EBITDA margins. Current partnerships include Ather Energy, alongside multiple RFQs under progress. Despite optimism around the li-ion initiative, analysts remain cautious on returns. A Neutral rating with TP of ₹1,030 (18x Jun’27E EPS) is maintained. #AmaraRaja #BatteryStocks #EV #EnergyStorage #StockMarket #InvestmentUpdate