Can Amara Raja Sustain Growth Momentum Amid Margin Pressures in FY26?
About Amara Raja
Amara Raja Energy & Mobility Ltd is one of India’s largest industrial and automotive battery manufacturers. Through its flagship brands Amaron and PowerZone, the company serves the automotive, industrial, telecom, and renewable energy segments. It is now transitioning towards lithium-ion cell manufacturing and green mobility solutions to align with the global EV revolution.
Amara Raja’s Q2FY26 results highlight steady topline growth but margin pressure due to elevated input costs and ramp-up expenses at its new energy business. However, robust domestic demand and improving cost rationalization are expected to stabilize margins in the coming quarters.
Financial Highlights (Q2 FY26)
| Metric | Q2 FY26 | QoQ | YoY |
|---|---|---|---|
| Revenue | ₹3,467 Cr | +2% | +7% |
| EBITDA | ₹374.3 Cr | +3% | -13% |
| EBITDA Margin | 10.79% | vs 10.71% | vs 13.29% |
| Net Profit | ₹276 Cr | +67% | +17% |
Revenue ₹3,467 Cr reflects stable automotive battery demand and improved exports despite competitive pricing pressure.
EBITDA ₹374.3 Cr saw mild sequential improvement driven by cost control measures.
EBITDA Margin 10.79% shows compression due to elevated lead prices and new product mix transition.
Net Profit ₹276 Cr rose sharply QoQ due to operational recovery and cost efficiency in the automotive segment.
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Peer Comparison
| Company | Revenue (₹ Cr) | EBITDA Margin |
|---|---|---|
| Amara Raja | 3,467 | 10.8% |
| Exide Industries | 4,215 | 12.1% |
| HBL Power | 1,015 | 15.0% |
Despite near-term margin headwinds, Amara Raja’s EV and lithium-ion initiatives position it for future energy transition growth.
Strengths
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Weaknesses
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Margins may remain under pressure until the lithium-ion business achieves operational scale. The company is investing ₹9,500 crore over 10 years in EV cell manufacturing and clean energy storage.
Opportunities
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Threats
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Despite cost challenges, Amara Raja’s leadership in batteries and clean energy positioning ensures long-term relevance in the evolving mobility ecosystem.
Valuation & Investment View
- Short-term: Neutral; margin pressures offset by seasonal uptick in demand.
- Medium-term: Positive on operating leverage and cost control.
- Long-term: Structural growth from EV battery diversification and clean energy focus.
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Amara Raja remains a robust long-term investment in India’s energy transition story, balancing conventional leadership with future-ready initiatives.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Registered Investment Adviser, observes that Amara Raja’s dual play in conventional and green energy makes it a balanced bet for sustained returns. Explore more such insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Amara Raja Energy
- Will Amara Raja’s EV Expansion Boost Margins in FY27?
- How Are Lithium-Ion Investments Impacting Profitability?
- Can Traditional Battery Business Sustain Market Share?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
