Amara Raja Energy & Mobility Limited — Q4 FY26 earnings call

Call held 26 May 2026

Management summary

Amara Raja Energy & Mobility reported a robust Q4 FY26 with consolidated revenue up 15% YoY to ₹3,530 crores, driven by strong domestic automotive and tubular battery demand. The New Energy business saw significant growth, contributing ₹280 crores. Despite geopolitical issues impacting exports and rising raw material costs, the company maintained Lead Acid Battery operating margins at 12.3% and outlined substantial capex plans for FY27, primarily for New Energy initiatives like the Giga 1 cell line and ESS integration facility.

Highlights

  • Consolidated revenue of ₹3,530 crores in Q4 FY26, a growth of ~15% over the previous year.

  • FY26 consolidated revenue stood at ₹13,814 crores, a growth of ~7.5% over the previous year.

  • Lead Acid Battery business grew ~12% YoY in Q4, driven by domestic automotive volumes, with 4-wheeler OEM volumes up >30%.

  • New Energy business clocked a revenue of ₹280 crores in Q4, representing ~1.5x growth over the previous year.

  • Tubular battery volumes grew >35% in Q4, with 70-75% from in-house manufacturing.

Concerns

  • Muted growth in export volumes of Automotive business due to ongoing geopolitical issues and tariff barriers.

  • Raw material costs, particularly alloys and sulfuric acid, increased substantially in Q4 due to geopolitical conflict.

  • Higher OEM mix (upwards of 30% in 4-wheeler and 2-wheeler) impacted overall margins.

  • Consolidated EBITDA margin for FY26 stood at 10.8%, diluted by additional expenses in New Energy business product development and ramping up production facilities.

  • Challenges in technology licensing/sharing from China impacting the Gotion partnership progression.

Key financials

3 periods

Q4

  • Consolidated Revenue
    ₹3,530 Cr
    YoY +15%
  • Standalone EBITDA Margin
    11%

Q4 Adjusted

  • Lead Acid Battery Operating Margin
    12.3%

FY26

  • Consolidated Revenue
    ₹13,814 Cr
    YoY +7.5%
  • Consolidated EBITDA Margin
    10.8%
  • Lead Acid Battery Operating Margin
    12.2%

What they filed

Q1 FY27: revenue up 20.6%, net profit up 4.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3,136 3,164 2,974 3,350 3,388 +8%3,351 +6%3,460 +16%4,041 +21%
EBITDA441 416 342 387 406 −8%374 −10%377 +10%407 +5%
Net profit241 312 167 194 302 +25%152 −51%322 +93%203 +5%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Lead Acid Battery Business
    92% Revenue Contribution (Q4)12% Growth (Q4)12.3% Operating Margin (Q4 Adjusted)12.2% Operating Margin (FY26)
  • New Energy Business
    ₹280 Cr Revenue (Q4)1.5× Growth (Q4)

Capital allocation

high confidence
  • Capex ₹600 Cr this quarter · ₹1,500 Cr (FY27) planned
    • Lead Acid Battery business (Q4 FY26) ₹600 Cr
    • Lead Acid Battery business (FY27 plan) ₹400 Cr
    • New Energy projects (FY27 plan) ₹1,100 Cr
    • Investment into Amara Raja Advanced Cell Technologies (Q4 FY26) ₹100 Cr
    As far as capex is concerned, we have spent roughly about INR600 crores in our Lead Acid business, both between the Battery business as well as the Recycling business. And the rest of the money was spent on the new energy projects, including the research lab and then Customer Qualification Plant. And these numbers, if I net off against the insurance claim that I have received, then the lead acid capex would be around INR500 crores. In the coming year, we would be spending an amount in the range of INR1,500 crores to INR1,700 crores as capex, about INR400 crores or so in the Lead Acid Battery business and less - rest of around INR1,100 crores to INR1,200 crores of capex in the New Energy business. This is a brief on the results. Now I'll request our Executive Director for Automotive and Industry, Mr. Harshavardhana Gourineni, to give his opening remarks.

Guidance & targets

Revenue

  • Consolidated Revenue Growth Revenue · FY27 · Medium confidence mid- to high single-digit growth
    Along those lines, we'll continue to see that mid to high single-digit growth, which is one, of course, growing a bit better than the market, also further segmenting ourselves, for example, our renewed focus on home energy will sustain, and we're looking to, of course, develop new products and put them into market.

    — H. Gourineni

Profitability

  • Lead Acid Battery EBITDA Margin Profitability · long term · Medium confidence 13% to 14%
    But as I mentioned in the earlier calls also that we would we are still hopeful to reach a 13% to 14% kind of an EBITDA margin even at a 2 lakh kind of a lead base predominantly on account of the initiatives that were alluded to earlier because even today from the existing plants, we are able to realize more throughput.

    — Y Delli Babu

  • BESS Plant Operating Margins (Initial) Profitability · start with · Medium confidence 6% to 7%
    The operating margins could be around, let's say, 6% to 7% to start with.

    — Y Delli Babu

Capacity

  • Giga 1 (2 GWh Cell Line) Production Start Capacity · 2027-06-01 · High confidence June of 2027
    The first 2 gigawatt hour line, Giga 1 is still on progress -- is in line to start production in June of 2027.

    — V. Gourineni

  • ESS Integration Facility Production Start Capacity · end of calendar year · High confidence end of this calendar year
    We're aiming to start production at the end of this calendar year with an initial capacity of 5 gigawatt hour in a facility with the ultimate capacity of 10 gigawatt hour.

    — V. Gourineni

  • ESS Integration Facility Initial Capacity Capacity · initial · High confidence 5 gigawatt hour

    — V. Gourineni

  • ESS Integration Facility Ultimate Capacity Capacity · ultimate · High confidence 10 gigawatt hour

    — V. Gourineni

  • Overall New Energy Target (Divitipally) Capacity · unchanged · High confidence 16 to 20 gigawatt hour
    While the overall target of 16 to 20 gigawatt hour Divitipally remains unchanged.

    — V. Gourineni

  • LFP Plant Production Start Capacity · 2028 and later · Medium confidence sometime 2028 and later
    LFP, we have a couple of products in the pipeline that we're developing. And as we get a little bit more confidence about the customer program on the EV side, we'll be able to announce that in due course, but probably sometime 2028 and later.

    — V. Gourineni

What to watch in Q1 FY27

Customer Qualification Plant Commissioning

coming months
Current Under commissioning
Target Full-scale operations commence

Why it matters

Indicates progress in new energy product development and readiness for commercial samples.

We are expecting the customer qualification plant, which is under commissioning is expected to commence its full-scale operations in the coming months.

Risks & concerns

  • Raw material cost inflation and rupee depreciation

    high

    Substantial increases in alloys, sulfuric acid, plastics, and freight costs, compounded by rupee depreciation, necessitating potential price hikes.

    Management acknowledged

  • Geopolitical issues and tariff barriers impacting exports

    medium

    Muted growth in export volumes of Automotive business due to ongoing geopolitical issues and tariff barriers in North American market.

    Management acknowledged

  • Impact of higher OEM mix on margins

    medium

    Higher OEM mix (over 30% growth in 4-wheeler and 2-wheeler OEMs) negatively impacted overall margins due to lower profitability in OEM sales.

    Management acknowledged

  • Challenges in technology sharing from China

    medium

    Chinese government policies discouraging technology sharing and licensing are impacting partnerships like Gotion, leading to a focus on internal R&D.

    Management acknowledged

  • Potential for policy measures to slow EV/BESS adoption

    medium

    Policy measures like localization norms, while beneficial for domestic industry, could increase solution costs and potentially slow down adoption, similar to solar.

    Analyst acknowledged

  • Customer in-house manufacturing of packs/cells

    low

    Some traditional customers are venturing into manufacturing their own packs and cells, but management believes the bulk of the market will remain open and opportunities exist.

    Analyst downplayed

Q&A highlights

8 direct
Equipment procurement for 2 GWh cell line Direct
The bigger challenge that we've been facing is not so much that we don't have access to equipment, but we have a little bit of limitations in terms of getting the engineers from China to come and help to actually commission the equipment.

Highlights potential execution risks and reliance on foreign expertise for new cell manufacturing capacity.

Asked by Vibhav Zutshi

Gotion partnership progression and technology licensing Direct
I think all of you would have also been seeing in the news that sharing of technology, licensing technology is something that's been largely discouraged by the Chinese government. This is hitting all players and their technical tie-ups pretty equally.

Explains the shift in strategy towards self-driven technology development due to geopolitical factors impacting prior partnerships.

Asked by Vibhav Zutshi

BESS plant margins Direct
The operating margins could be around, let's say, 6% to 7% to start with. But we feel as the opportunity progresses, while we are starting with the 5 gigawatt initial capacity, I'm sure it can be expanded further. And as the scale improves, I feel there is an upside possible on these margins.

Provides initial margin expectations for the new BESS business and indicates potential for improvement with scale.

Asked by Vibhav Zutshi

Raw material input cost inflation and price hike expectations Direct
So as you know, Raghu, about 70% of the material is between lead and alloys and naturally alloys like tin, antimony, all these are showing increasing trends... on the other materials, plastics account for almost 10% of our raw material cost. There, again, we are seeing almost 40% kind of price increase is possible... Considering there being an evolving scenario at this point of time, in my view, at least another 2% to 3% kind of a price increase is something that we should look for.

Details the specific raw material cost pressures and signals potential for further price increases to maintain margins.

Asked by Raghunandhan NL

Benefits from captive recycling plant Direct
Last quarter, we have seen about 0.5% benefit coming from the recycling plant because predominantly, it was a refining operation that we are currently operating in. We are expecting our battery breaking operation to stabilize in the coming quarter.

Quantifies the initial margin benefit from recycling and indicates future potential as operations stabilize.

Asked by Raghunandhan NL

New Energy business scale-up (2 to 16 GWh), buyer visibility, and BESS mix Direct
So when we're building a 5 gigawatt hour ESS plant, up to that capacity, whatever we're making ESS cell, we are the end user as such. So I think we have more belief that our ability to sell the systems. So some sort of mix between 4-wheeler OEMs and our own ESS capacity is how we'll bridge the 16 gigawatt hour.

Clarifies the strategy for utilizing the planned 16-20 GWh capacity, with ESS acting as a significant internal off-taker.

Asked by Ganeshram

New Energy cell cost vs imported and ROCE Direct
I think it's like China plus 15% to 20% is the minimum that we can bridge immediately because we don't have local material... But if we can look at that kind of cost disadvantage getting factored, if we can achieve a scale of about 8 to 10 gigawatt hour, we see that there is a possibility of an EBITDA margin in the range of 10% to 11%. And... it is going to be a low double-digit number.

Provides insights into the cost competitiveness strategy and expected ROCE for the New Energy business at scale.

Asked by Ganeshram

Long-term Lead Acid Battery business outlook and EV transition impact Direct
To elaborate on that, I think first, we do see a long runway with lead acid battery product, but we're not linking anything to a vision because we're quite flexible in our approach. We continue to unlock capacity within the same footprint between the same 4 walls and meeting our growth ambitions.

Reassures investors about the continued relevance and growth potential of the lead acid business despite the EV transition.

Asked by Kapil Singh

2 min read 6 chapters

Detailed narrative

Q4 FY26 Financial Performance Overview

Amara Raja Energy & Mobility reported a consolidated revenue of ₹3,530 crores in Q4 FY26, marking a ~15% growth over the previous year. For the full fiscal year FY26, consolidated revenue reached ₹13,814 crores, a ~7.5% increase YoY. The Lead Acid Battery business contributed approximately 92% of the Q4 revenue, while the New Energy business generated ₹280 crores, growing about 1.5 times YoY. The standalone EBITDA margin for Q4 stood at ~11%, with the Lead Acid Battery business achieving an adjusted operating margin of 12.3%.

Lead Acid Battery Business Dynamics

The Lead Acid Battery business experienced robust growth of ~12% YoY in Q4, primarily driven by domestic automotive volumes. 4-wheeler OEM volumes grew over 30%, and aftermarket volumes (both 4-wheeler and 2-wheeler) increased by 5-6%. Tubular battery volumes saw significant growth of over 35% due to seasonal demand, with 70-75% from in-house manufacturing. However, export volumes were muted due to geopolitical issues and tariff barriers, though customer relationships in regions like the Middle East, Southeast Asia, and Africa were maintained.

New Energy Business Development and Investment

The New Energy business achieved a revenue of ₹280 crores in Q4 FY26 and crossed cumulative installations of 1 gigawatt hour in stationary applications. The company infused an additional ₹100 crores into Amara Raja Advanced Cell Technologies in Q4, bringing the total investment to ₹1,500 crores. The customer qualification plant is expected to commence full-scale operations in the coming months, and a battery energy storage facility (initial 5 GWh, ultimate 10 GWh) is slated for production by the end of the current calendar year.

Cell Manufacturing and Technology Strategy

The first 2 gigawatt hour Giga 1 cell manufacturing line is on track to begin production by June 2027. While the company initially pursued technology licensing through the Gotion partnership, challenges with technology sharing from the Chinese government have led to a focus on self-driven product development by Indian teams. The overall target for New Energy capacity at Divitipally remains at 16 to 20 gigawatt hours, with LFP plant production anticipated sometime in 2028 or later.

Cost Pressures and Pricing Actions

The company faced significant cost pressures in Q4 from rising raw material prices, particularly for alloys, sulfuric acid, and plastics, which saw increases of up to 40%. Rupee depreciation and higher freight costs further contributed to these pressures. To mitigate this, Amara Raja implemented price increases of 5-6% in the domestic automotive business in Q4 and indicated a potential need for further price adjustments of 2-3% in the coming periods, depending on competitive dynamics.

Long-term Outlook and EV Transition

Management expressed confidence in the continued long-term demand for lead acid batteries, especially for auxiliary, home energy, and replacement markets, asserting that multiple vehicle platforms (ICE, hybrid, EV) will coexist. While the New Energy business's mix is currently leaning towards stationary storage, the company aims to be the number one low-voltage solution supplier in India, leveraging its existing investments and adapting to market conditions and technology adoptions.

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