Amara RAJA Energy & Mobility Ltd (formerly Amara Raja Batteries Limited)

Data basis.

• Consolidated financials, normalised by S&P Global Market Intelligence (StockAnalysis.com, updated 10 Aug 2026). Figures are converted from INR millions to INR crore.

• The S&P revenue line equals company-reported "revenue from operations" (FY26: INR 13,814 crore).

• S&P EBITDA and operating income exclude other income and unusual items. They can therefore differ from company-reported EBITDA. For example, company-reported FY26 standalone EBITDA is about INR 1,895 crore (Anand Rathi data).

Income statement (INR crore)

Revenue CAGR FY2022–FY2026 (computed): ~12.3%. The 10-year revenue CAGR is ~11.4%, from INR 4,691 crore to INR 13,814 crore (Craytheon).

Reported versus underlying FY2026.

• Company-reported consolidated FY26 PBT was INR 1,206.9 crore (−5.2%) and PAT was INR 895.77 crore (−5.2%).

• FY26 PBT includes an exceptional gain of INR 181.15 crore from the final insurance settlement of the 2023 fire, booked in Q4.

• Excluding it, underlying PBT was about INR 1,026 crore, roughly 19% below FY25 (computed).

• S&P classifies about INR 259 crore of FY26 items as unusual, against about INR 117 crore in FY25.

Standalone versus consolidated.

• FY26 standalone: revenue INR 13,548.86 crore (+9.2%), PBT INR 1,307 crore, PAT INR 970.43 crore (+0.7%), EPS INR 53.02.

• Consolidated PAT is about INR 75 crore lower. The gap is mainly ARACT and other new-energy subsidiary losses.

Quarterly trajectory (consolidated, INR crore)

Notes.

• Q2 FY26 is derived as FY26 less Q1, Q3 and Q4.

• The Q3 FY26 revenue figure is INR 34.1 bn (Mercom).

• Q4 FY26 PAT includes the INR 181.15 crore exceptional item (pre-tax).

• The Q2 FY26 EPS is derived; the company-reported standalone Q2 EPS was INR 16.52.

• Consolidated EBITDA margin was 10.7% in Q1 FY26 and 9.6% in Q1 FY27. Standalone margin in Q1 FY27 was 10.1%.

Balance sheet (INR crore, 31 March)

Notes.

• Source: S&P via StockAnalysis.

• Cash includes trading securities and short-term investments. Long-term investments of about INR 352 crore are excluded.

• The FY2023 goodwill reflects the Mangal Industries plastics acquisition, recorded with an appointed date of 1 April 2022.

Cash flow (INR crore)

Note. Q1 FY27 capex was about INR 450 crore against FY27 guidance of about INR 1,700 crore (Q1 FY27 call).

Ratios (computed)

Methodology.

• ROE and ROA use average balances.

• ROIC = EBIT × (1 − tax rate) ÷ (equity + debt − cash).

• Interest coverage uses S&P interest expense. Some aggregators show about 20x using a different interest definition (Craytheon).

• The Craytheon and Sharpely reported ROE of 11.1–11.6% for FY26 is consistent with these figures.

Commentary on trends, inflections and drivers

Revenue.

• Growth decelerated each year, from 21.6% in FY22 to 7.5% in FY26.

• FY22–FY23 benefited from price increases passed through on lead and post-COVID auto recovery.

• FY25–FY26 slowed because of:

  • the structural decline in telecom lead-acid, partly replaced by lower-value Li-ion packs;

  • export weakness from Middle East geopolitics and tariff uncertainty;

  • muted industrial demand.

Q1 FY27 is a clear inflection: Revenue rose 23.9%, helped by a strong OEM cycle (SIAM Q1 passenger vehicle volumes +25.9% and 2W +20.3%), aftermarket strength, a hot summer for home energy, and price hikes. TTM revenue is now INR 14,628 crore.

Margins.

• Gross margin has been stable at 31.5–32.6% since FY23.

• The decline in operating margin, from 10.1% in FY24 to 6.5% in FY26, is therefore an operating-cost story:

  • SG&A rose from INR 812 crore to INR 1,067 crore;

  • other operating expenses rose from INR 1,338 crore to INR 1,817 crore;

  • D&A rose from INR 435 crore to INR 546 crore (S&P EBITDA basis);

  • advertising rose from INR 73 crore to INR 108 crore.

• Pre-operative costs at ARACT, higher brand spend and new-plant ramp-up costs are the main drivers.

• Raw-material volatility in lead, plastics, sulphuric acid and alloys hurt FY26 and Q1 FY27.

• 360 ONE cut its FY27E EBITDA margin estimate to 11.5% from 12.7% after Q1. Several brokers believe Q1 FY27 was the margin trough.

Earnings.

• Net income compounded from INR 513 crore in FY22 to INR 945 crore in FY25, then fell 5.2% in FY26 despite an insurance windfall.

• TTM net income (June 2026) is INR 922 crore, with TTM EPS of INR 50.37.

Balance sheet.

• The balance sheet is very conservative. Debt/equity is 0.05x and net debt was roughly zero at FY26.

• The company moved from a net cash position of INR 230–300 crore in FY24–FY25 to a slight net debt of INR 43 crore in FY26, as short-term borrowings funded the capex surge.

• PP&E plus capital work in progress grew from INR 4,569 crore in FY24 to INR 7,361 crore in FY26, a rise of 61%.

Cash flow.

• Operating cash flow fell 17% in FY26 as inventory rose by INR 319 crore.

• With capex at INR 1,341 crore, free cash flow turned negative (−INR 223 crore) for the first time since FY22.

• With FY27 capex guided at about INR 1,700 crore, FCF is likely to stay negative or near zero in FY27. The funding mix will lean on modest debt; leverage headroom is ample.

Returns.

• ROIC fell from 13.5% in FY24 to 8.2% in FY26. This reflects heavy investment in assets that do not yet earn returns (capital work in progress of INR 1,585 crore and the CQP), plus core margin compression.

• Returns should recover only as Giga 1 (June 2027) and the BESS plant ramp up.

Guidance and consensus

Bull case

1. The core is re-accelerating while the stock is de-rated.

   • Q1 FY27 revenue grew 23.9% with domestic automotive above 20% and home energy above 30%.

   • Yet the stock trades at ~14.7x TTM earnings and ~9.2x EV/EBITDA. That is roughly the lead-acid business alone at a discount to the 15–16x multiples brokers apply.

   • The lithium and BESS option is effectively free at INR 743, against SOTP targets of INR 1,034–1,195.

2. BESS could be a capital-light near-term earner.

   • The 10 GWh LFP plant needs only INR 250–300 crore of initial capex, and first deliveries are indicated for Q3 FY27.

   • Anand Rathi sees revenue potential of up to INR 4,500 crore by FY30E, about one-third of FY26 consolidated revenue.

3. Several overhangs are clearing. The APPCB closure orders were revoked (July 2026), the insurance claim is settled, management succession is complete, and Q1 FY27 margins (9.6%) are widely viewed as the trough. Recovery towards 11.5–13% EBITDA margins would lift EPS sharply on a 1.3x asset-turnover base.

Bear case

1. Margins keep structurally eroding.

   • Operating margin fell from 10.1% (FY24) to 6.5% (FY26) and Q1 FY27 missed again.

   • Input inflation outran price hikes, and pre-operative and depreciation costs from INR 1,700 crore of annual capex will rise as assets are commissioned.

   • Consolidated earnings could stagnate for two more years.

2. Cash burn and returns dilution. FY26 free cash flow was negative (−INR 223 crore), ROIC has fallen to 8.2%, and FY27 capex exceeds operating cash flow. If cell yields or customer qualification slip beyond June 2027, capital is tied up without returns.

3. Competitive intensity in lithium. Exide has invested 2.5x more (INR 4,802 crore) in cells. Tata, Ola and Reliance are scaling, and Chinese LFP cells and BESS set global price floors. Telecom lead-acid erosion and Middle East exports (−20%) compound the pressure.

Catalysts and monitorables (next 12 months)

Analyst verdict

Amara Raja Energy & Mobility is at its most contested point since its 1985 founding. It is still a high-quality legacy franchise, but it is being re-underwritten as a capital-intensive energy-transition play.

The core is sound.

• Amaron's brand and distribution, a lead-acid duopoly with Exide, and more than 60% telecom share across chemistries generate dependable cash.

• CRISIL's AA+ rating and a balance sheet with debt/equity of 0.05x give the company room to invest without equity dilution.

• Q1 FY27's 24% revenue growth shows the domestic franchise is not ex-growth. OEM wins, aftermarket share and home energy are all compounding.

But the financial profile has deteriorated in ways the market has rightly penalised.

• Operating margin fell by more than a third in two years, from 10.1% to 6.5%.

• ROIC halved to ~8%.

• Free cash flow turned negative in FY26 and will stay constrained through FY27 as INR 1,700 crore of capex flows mainly into lithium.

• Reported FY26 profit flattered underlying performance through a one-off INR 181 crore insurance gain. Excluding it, pre-tax profit fell roughly 19%.

At INR 743, the market is largely pricing the lead-acid business alone.

• 14.7x trailing earnings and 1.7x book are below the 15–16x lead-acid multiples brokers apply in SOTP valuations.

• The new-energy option therefore carries little implied value.

• That asymmetry is attractive if management delivers on two dated milestones: first BESS deliveries in Q3 FY27 and Giga 1 start-up by June 2027.

Overall assessment: cautiously constructive / accumulate on evidence.

• The risk-reward favours patient investors.

• Conviction should be scaled to proof points: a sequential EBITDA margin recovery above 10.5% in Q2–Q3 FY27, a disclosed BESS order book, and cell qualification wins with named customers.

• Failure on margins combined with gigafactory slippage would turn today's apparent value into a value trap.

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Sources consulted (primary and secondary)

Company and exchange filings

• NSE filings: COO change (19 Jan 2026); senior management change (1 Apr 2026); auditor change (29 May 2025); ARACT auditor resignation (24 Sep 2025); 41st AGM voting results (10 Aug 2026); Q1 FY27 earnings call transcript (14 Aug 2026). nsearchives.nseindia.com

• BSE filings: Q4 FY24 investor presentation (30 May 2024); Q3 FY24 results (31 Jan 2024). bseindia.com

Results and corporate news

• pv magazine India: Q4 FY26 results (26 May 2026); US subsidiary (Feb 2026).

• Autocar Pro: FY26 results (26 May 2026).

• Bajaj Broking: Q4 FY26 segment data.

• 5paisa: FY26 standalone and consolidated summary.

• Mercom India: Q4 FY26, Q3 FY26 and Q1 FY27 coverage.

• FilingReader: FY26 results and dividend; CBO appointment; board meeting intimations.

• Free Press Journal; Askfuzz / Business Standard; Swastika; Multibagg; Indian Chemical News; Angel One: Q1 FY27 coverage.

• Sahi: Q1 FY27; capex; APPCB revocation; investor meetings.

• Reuters via Zerodha: CQP commissioning, 15 Jul 2026.

• Batteries International: April 2026 appointments.

• Business Standard: Q3 FY26 stock reaction; Nuvama note (Oct 2025); May 2021 block deal.

• The Machine Maker: Q2 FY26.

Financial data and broker research

• StockAnalysis.com (S&P Global Market Intelligence): income statement, balance sheet and cash flow for FY2022–FY2026 and TTM.

• 360 ONE Capital Q1 FY27 result update (11 Aug 2026).

• Valorem Advisors Q1 FY27 concall highlights.

• DSIJ summary of the Anand Rathi note (Aug 2026).

• CompoundingAI Q1 FY27 preview.

Credit ratings

• CRISIL rating rationales: AREML (30 Mar 2026; 30 Dec 2024; 3 Nov 2023); ARACT (30 Mar 2026; 12 May 2025); ARPSL (20 Nov 2025; 23 Aug 2024); Amara Raja Electronics (23 Aug 2024).

Market data and shareholding

• ICICI Direct, Dhan, Trendlyne, Upstox, IndMoney: share price and market cap, Oct 2026.

• Sharpely: returns and consensus target price.

• Bajaj Finserv: top shareholders.

• Equitymaster: shareholding history.

• MarketsMOJO: technical rating changes, Sep–Oct 2026.

Peers

• Exide Industries FY26 results: Free Press Journal; Kotak Neo; The Machine Maker; Indian Chemical News; ScanX.