Amara Raja Accelerates Giga-Cell and BESS Projects with ₹1,700 Crore FY27 Investment Plan; Giga 1 Plant Expected to Begin Commercialisation in H1 FY28

Amara Raja Accelerates Giga-Cell and BESS Projects with ₹1,700 Crore FY27 Investment Plan; Giga 1 Plant Expected to Begin Commercialisation in H1 FY28

Amara Raja’s Q1 Revenue Rises 24% to ₹4,215 Crore as New Energy Business Surges Over 70%

The Electrcial Post

Amara Raja Energy & Mobility Limited reported robust financial performance in the first quarter of FY2026–27, with consolidated revenue growing approximately 24% year-on-year to ₹4,215 crore, supported by sustained demand across its lead-acid battery business and strong momentum in new energy solutions. The company's new energy business recorded revenue of around ₹209 crore, registering growth of more than 70%, while the lead-acid battery business grew approximately 22%. However, higher raw material costs and strategic investments in brand promotion, manufacturing capabilities and new energy projects moderated profitability during the quarter.

Speaking during the company's Q1 FY27 earnings conference call, Y. Delli Babu, Chief Financial Officer of Amara Raja Energy & Mobility Limited, said the company continued to strengthen its position in the automotive and home energy markets, supported by healthy volume growth across original equipment manufacturer (OEM) and aftermarket segments.

Automotive aftermarket volumes grew approximately 15% in both the four-wheeler and two-wheeler categories. In the OEM segment, four-wheeler volumes increased around 24%, while two-wheeler volumes grew more than 35% year-on-year. The home energy business also delivered growth of over 60%, driven by demand for tubular batteries and home energy power solutions. The company's tubular battery manufacturing plant operated at full capacity during the quarter, with additional demand being met through traded batteries. Trading revenue accounted for approximately 15% of lead-acid battery revenue.

International automotive revenue, however, declined around 20%, primarily due to a significant fall in volumes in the Middle East market. The company expects volumes in these markets to recover in subsequent quarters.

In the industrial lead-acid battery segment, revenue increased approximately 2% year-on-year. UPS battery volumes grew around 10%, while telecom lead-acid batteries continued to face pressure as the sector increasingly transitions towards lithium-ion technology. Lithium-ion telecom battery volumes rose approximately 50%, enabling Amara Raja to maintain a combined market share of more than 60% in the telecom segment.

The new energy business remained a key growth driver, supported by increasing demand for telecom battery packs and three-wheeler electric vehicle packs. Both EV and telecom packs recorded volume growth of more than 50% year-on-year during Q1 FY27. Strengthening its capabilities in advanced battery technologies, the company inaugurated its customer qualification plant in July 2026, featuring multi-format and multi-chemistry capabilities. Its E Positive research facility is also expected to commence operations during the current quarter.

Amara Raja's upcoming giga-cell manufacturing facility and its 10 GWh battery energy storage system (BESS) plant remain on track for commissioning according to previously indicated timelines. The giga-cell facility is expected to begin commercialisation in the first half of FY2027–28, marking an important step in the company's long-term transition towards advanced energy storage and battery manufacturing.

On profitability, the company reported a standalone EBITDA margin of approximately 10.1%, while its consolidated EBITDA margin stood at 9.6%. Delli Babu attributed the moderation in margins to rising procurement costs for key raw materials, including alloy, sulphuric acid and poly, alongside higher expenditure on brand promotion, manufacturing improvements and strategic initiatives.

The company had implemented a price increase of approximately 3% in June to partially offset higher input costs. However, continued increases in the procurement costs of sulphuric acid and poly, together with higher warranty provisions, put additional pressure on profitability. Amara Raja plans to introduce further price increases of around 2% to 3% during the current month to address the continuing cost pressures.

Strategic investments also contributed to the moderation in operating margins. The company increased expenditure on brand-building activities, including promotional initiatives associated with the Indian Premier League (IPL), to strengthen brand awareness and improve its presence across consumer-facing product categories. It also continued investing in manufacturing excellence and capacity enhancement at its existing automotive battery plants, with the objective of improving operational efficiency and manufacturing competitiveness.

During the quarter, these strategic initiatives reduced margins by approximately 0.9 percentage points, according to the CFO. At the consolidated level, additional expenditure associated with the upcoming giga-cell and BESS projects also affected profitability.

As part of its customer engagement strategy, Amara Raja launched Amaron Assist in Hyderabad during Q1 FY27. The pilot initiative focuses on providing automotive services directly to business-to-consumer (B2C) customers. The company will evaluate the pilot's performance and customer feedback before determining its long-term service business model.

Looking ahead, Amara Raja plans to invest approximately ₹1,700 crore in capital expenditure during FY2026–27. Of this, around ₹1,300 crore is earmarked for the new energy business, with the remainder allocated to the lead-acid battery business, including recycling-related investments. The planned expenditure will primarily support the giga-cell facility, the 10 GWh BESS project, the E Positive facility and other manufacturing initiatives.

The company spent approximately ₹450 crore on capital expenditure during Q1 FY27, with the majority directed towards its new energy business.

Amara Raja's performance highlights the continued strength of its established lead-acid battery operations alongside the rapid expansion of its new energy portfolio. While near-term margins remain exposed to raw material inflation and investment-related expenditure, the company's capacity expansion programme and focus on advanced battery technologies are intended to position it for growth in electric mobility, telecom infrastructure and grid-scale energy storage.
 

Published at : Oct 26, 2026 09:05 AM (IST)

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