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Amara Raja didnât win Advanced Chemistry Cell (ACC) Battery Storage Manufacturing PLI biddings both the times. Reliance won both the times (25% of its bid the 1st time, 100% of its bid the 2nd time)
24 March 2022 - Press Release:Press Information Bureau
4 September 2024 - Press Release:Press Information Bureau
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Q2 FY25 Press.pdf (506.0 KB)
Result is flat âŚwait and watch of management commentary
Battery Recyling Plant at Cheyyar- Tamil Nadu
1.5 Lac MTPA (Phase I and Phase II) State-of-the-art Advanced Green field Lead Acid Battery Recycling plant
⢠Refinery construction completed and Commercial production to commence in Nov/Dec 2024
Tubular Battery Plant at ARGC- Chittoor
1 Mn+ Battery/ Annum Advanced Tubular Manufacturing plant
⢠Plant Redesigned with improved Fire Safety Measures
⢠Commercial production expected to commence during Q4 FY25
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AMARAJABAT_09022025153258_InvestorPresentation_Q3FY25.pdf (2.8 MB)
Read Financial after adjusting Insurance claims of Rs 111.1 Cr!!! Result is very flat and margin pressure on the operating level!!!
Battery Recyling Plant at Cheyyar- Tamil Nadu
*1.5 Lac MTPA (Phase I and Phase II) State-of-the-art Advanced Green field Lead Acid Battery Recycling plant
⢠Phase I with 50K MTPA refinery capacity (eventual capacity of 1Lac MTPA) commercial production commenced in December 2024. Battery breaking
expected to commence from Q1- FY26.
Tubular Battery Plant at ARGC- Chittoor
1 Mn+ Battery/ Annum Advanced Tubular Manufacturing plant
⢠Plant Redesigned with improved Fire Safety Measures
⢠Commercial production expected to commence from Q4
FY25/Q1 FY26
Almost ONE Quarter will be delayed of the projects.
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Concall notes for Q3 below
FY25Q3
- Lead acid contributed 96% with rest from new energy business
- Lead acid
- Revenue grew by 9% YoY from strong volume growth from automotive and industrial segments. Revenue is expected to grow at 11-12%
- 4W volumes: aftermarket 11% OEM muted
- 2W volumes: aftermarket and OEM ~ 16-17%
- Export volume: 8-9% due to order changes during 3QFY25 and expected to grow in double digit by end of 4QFY25
- Industrial segment: UPS and exports have grown significantly while overall volume growth was muted due to dip in the telecom segment (-25% YOY)
- Donât expect growth in the telecom segment in near term
- Trading business was 10% and telecom segment was 10-11% of revenues
- Tubular plant will come online in Q1FY26 with 1100-1200 cr. revenues.
- Received cumulative insurance claims of 275 cr. for tubular plant reinstatement post-fire, leading to exceptional gain of 111 cr.
- Recycling plant commenced first phase of commercial operations, refining 50,000 tons, with smelting operations to begin by end of Q1 FY26.
- Market share of 33-34% in the automative aftermarket with higher share in 2-W (35-36%), 25% in OEM 2W, 57-58% in telecom segment (lithium+ lead), 42-43% in UPS, 10-11% in inverter batteries
- Current capacity utilization of 4W is 85-90% and 2W is 90%
- Current capacity for AGM batteries is 2 mn.
- New energy
- New energy business revenue decreased by (-20% YoY) due to some change in OEM side and is expected to recover with localization plans
- In FY24, lithium packs and chargers generated ~ 500 cr. with ~10% growth expected in FY25
- The first gigafactory for NMC cells is expected to commence operations between late 2026 and early 2027
- Initial revenue expectations for the NMC cell plant are based on $70 to $75 per kilowatt hour pricing, with a phased capacity ramp-up.
- Lubes distribution revenue was 100 cr.
- Gross margin impacted due to increased costs of alloy metals (tin, antimony) and power cost revisions from last year from AP government (35-37 cr.). Power cost revision will be ~14 cr. in FY25 in Q4 and should reduce margins by 0.4-0.5%. By Q4 all previous year levies will be over
- They plan to rampup renewable energy sourcing to reduce power costs
- There was comprehensive income of -132 cr. due to the fair value reassessment of investments made in some startups
- FY25 capex ~ 400 cr. (excluding tubular plant) + 200-300 cr. on new energy business
- FY26 capex ~ 1000 cr.
Disclosure: Invested (no transactions in last-30 days)
17 Likes
Annual Net profits fallen by 9% due to Q4 results which fall by 31% on core levels. ( Without Other Income Effect ).
Why I like Amara raja
When we talk about EVs in India, I genuinely believe weâre following a path more like China than the West. As the Amara Raja chairman pointed out in one of his interviews, India shares a lot of similarities with China in terms of urban structure and demographics. The US has limited motivation to push for EVâs, they like huge gas guzzlers and they also have oil. India doesnât. A huge chunk of our foreign exchange still goes into oil imports, so thereâs a very real, very economic reason for the government to push EV adoption.
Add in the rising pollution levels and urban health concerns, and the motivation becomes even stronger. I wouldnât be surprised if, in the next 5 years, EVs account for 50% or more of new car sales in Indian citiesâespecially for daily commutes in the 50â100 km range, where EVs are simply more practical.
Just look at whatâs happened in China. In cities like Shenzhen or Shanghai, EVs are everywhere. It didnât happen overnightâit was a mix of policy, practicality, and product-market fit. I see India heading in that same direction.
Amara Raja isnât the flashiest name in the EV spaceâbut thatâs exactly why I like it.
While everyoneâs busy chasing the next big disruptor, Amara Raja is doing something refreshingly sensible: playing to its strengths while keeping an eye on the future. It continues to dominate in the lead-acid battery segment, which still brings in the bulk of its revenue and solid cash flows. Meanwhile, itâs taking slow, measured steps into the EV battery spaceâno over-the-top capex, no wild pivotsâjust steady progress.
The only fly in the ointment? Corporate governance. The promoter payoutsââš120â130 Cr shared between the chairman and his sonsâfeel excessive, especially relative to the profits. Itâs not a deal-breaker, but itâs definitely something Iâd like to see managed better from a shareholder perspective.
Still, with a healthy ROCE (~16.8%), growing operating cash flow, and a steady grip on the battery market, Amara Raja remains, in my view, one of the most underrated EV-transition plays in Indiaârooted in fundamentals, but ready for the future.
Declaimer: Invested.
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When two companies dominate a sector for decades like Exide Industries and Amara Raja Batteries in Indiaâs battery market the smart investor doesnât look at momentum charts. He looks at moats, management, and the math of compounding. In that light, my bet has always been on Exide. Itâs not the louder company, but itâs the wiser allocator of capital, with a broader distribution moat, deeper trust in rural India, and a leadership that has consistently avoided political entanglements
A few years ago, when I was first researching Exide as an investor, I couldnât help but examine its closest competitor Amara Raja. They were the only two real contenders in a market where 80%+ share is split between them. On the surface, both seemed like good businesses. But Buffett taught us long ago: the job isnât to buy what looks âgood.â The job is to own what will compound quietly, predictably, and over decades resulting my conviction in Exide after investing in 2022 it made me a 37.08% CAGR as of now.
I chose Exide not because it had the best marketing campaign, but because it had the right business model, balance sheet discipline, and managers who avoided the limelight. My only regret I didnât contributed enough of my networth when the time was right ..
While Amara Raja built a powerful B2C brand through âAmaron,â it remained largely concentrated in the replacement market and in specific regions (notably South India). It performed well, yes but its growth always needed to be fought for. Meanwhile, Exide entrenched itself far more deeply: from automotive OEMs (Maruti, Hyundai, Tata) to telecom towers, railways, defence labs, solar grids, and even space systems. It wasnât glamorousâbut it was sticky.
Most investors know Amara Raja for its recent âš9,500 crore gigafactory announcement. Fewer realize Exide had already executed a smarter capital strategy years earlier: divesting its life insurance arm in 2021 (Exide Life) to unlock âš6,687 crore, which it reinvested into Indiaâs first lithium-ion cell gigafactory via its JV with then swiss battery firm LeclanchĂŠ.
Today in 2025, Exideâs Bengaluru-based Exide Energy is far ahead in the lithium curve, while Amara Rajaâs plant is still under construction. Execution risk and sourcing complexities are not trivial in this space. Timing and foresight matter and Exide acted first.
Warren Buffett often spoke of his confidence in GEICO not because of what they did, but who ran it. He admired Leo Goodwin and later Tony Nicely managers who avoided the spotlight and let the business do the talking.
That brings us to Amara Rajaâs promoter, Galla Jayadev a former Member of Parliament until 2024. While he stepped down from politics âto focus on the business,â the fact that his company faced shutdowns by the Andhra government in 2021 (on environmental grounds) and had land leases revoked, raises questions about governance continuity. Whether politically motivated or not, such events create unnecessary tail risks for shareholders.
In contrast, Exideâs leadership remains invisible by design and thatâs a compliment. You wonât see them courting Twitter or headlines. Youâll see them de-risking supply chains, backward-integrating with recycling plants, and signing strategic OEM tie-ups. Thatâs the kind of operator a Graham-Dodd investor backs.
In FY25:
Amara Raja posted âš12,405 crore in revenue with net profit at ~âš900 crore, but Q4 profits fell ~27% YoY due to rising raw material costs and power tariffs. Its 5Y CAGR in market cap? 14.5%.
Exide, meanwhile, clocked âš16,600 crore in standalone revenue and âš1,077 crore PAT, with a market cap CAGR of 18.3% over 5 years. Cash flows have improved, debt is minimal, and dividend payouts remain consistent.
Exide has also reduced working capital days from 39 to ~31 and reinvests quietly not chasing âvision decksâ but delivering grid-scale Battery Energy Storage Systems (BESS) with Tata Power.
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Comparing Amara Raja & Exide on the following metrics:
- Last 10 year CAGR Sales Growth : Amara Raja - 11.4%, Exide - 6.2%
- Operating margin% - Amara Raja is better for each year wrt Exide in the last 10 years
- Last 10 year CAGR PAT Growth : Amara Raja - 8%, Exide - 2%
- ROCE for Amara Raja - Declining but above 15% for last 10 years, For Exide - Declining and below 10% currently
- Debt/ Equity : Amara Raja - 0.04, Exide - 0.14
- Free Cash flows - Better for Amara Raja for the last 3 years
- PE Ratio : Amara Raja - 20.4, Exide - 42.2
Agreed that there have been disturbances due to political climate earlier, but they have not impacted the business for a longer duration. Also, they are diversifying their manufacturing presence through plants in Tamil Nadu, Telangana.
Considering the above aspects, feel Amara Raja has been performing well in the current scenario..
However, future seems uncertain due to massive investments in Lithium Ion Gigafactory and associated lower return ratios. Still, expect the management to do well in the medium to long term with their management expertise and technological tie-ups.
Disclosure: Invested in Amara Raja.
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This platform provided very useful deep insights to the community so far and we should keep this keep going. Humans are bias in nature so when we invested our money or emotions or time or anything we inclined to defend them. Itâs okay everyone has their thesis. Letâs not debate who is great who is not. We all here to get knowledge and share knowledge. Thank you all for your valuable insights.
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The way I see Amara Raja is as a two-engine story.
On one hand, you have the legacy lead-acid business - solid, cash-generating, well-run operation thatâs available at attractive valuations. While not headline-grabbing, it provides stability, predictability, and a margin of safety. With efforts in backward integration (recycling), digital manufacturing (Industry 4.0), and global expansion, this legacy business is far from being a sunset play. Promoters have always been good capital allocators (havenât raised equity for decades now, very little debt), plus like others have written above, they have been displaying more skin in the game since last year.
On the other hand, you have deep, strategic optionality in the New Energy Business. Lithium-ion gigafactories, early OEM relationships, investments in R&D and BMS, and alliances with global technology leaders are laying the groundwork for a potentially transformative future. If ARE&M executes even moderately well in this vertical, the market may have significantly underappreciated the upside.
Valuing ARE&M purely on the basis of todayâs earnings misses the forest for the trees. The lithium-ion business might be sub-scale today, but itâs a decent optionality to play. With time, execution, and scale, what seems like a cost center today can become the engine of disproportionate value tomorrow. ARE&Mâs early investments in technology and manufacturing give it a real shot at being among the first scaled Indian cell makers.
Honestly this seems like a no brainer, valuations are more than reasonable, earnings yield ~7%, never mind that the share price hasnât moved for years now. Itâs a classic case of buying a quality legacy business at fair value, with the lithium optionality thrown in for free. The valuation you give to the optionality is the long term upside that you should expect at the least.
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