Amara Raja Energy & Mobility (500008) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 consolidated revenue reached INR 3,401 crore (INR 34,011 Mn), up 4–4.2% year-over-year and 11–11.1% sequentially, with 95–96% from lead-acid batteries and the remainder from new energy batteries and chargers.

• Four-wheeler OEM volumes grew 12–13% and aftermarket volumes rose 5% year-over-year; two-wheeler volumes increased 5–6%.

• Export volumes declined 7–8% year-over-year due to market weakness and tariff challenges; efforts are underway to revive growth.

• New energy business revenue was INR 122 crore, driven by strong telecom sector demand for lithium packs, though EV segment demand slowed and the segment posted a loss.

• Name change in 2023 reflects broader energy transition vision; strong brand presence and export footprint in 60+ countries.

Financial highlights

• EBITDA margin for Q1 FY26 was 10.7–11.5%; adjusted for lithium revenues, margin was 11.7–11.8%.

• PAT for Q1 FY26 was INR 1,648 Mn (₹164.80 crore), down 33.8% year-over-year, with PAT margin at 4.8%.

• Margins were subdued due to higher material, power, and employee costs, as well as increased warranty provisioning.

• Trading revenue mix increased to 23% from 19% year-over-year, diluting EBITDA margin.

• No aftermarket price increases were taken in Q1 FY26; last increase was in Q1 FY25.

Outlook and guidance

• Demand for lithium packs in telecom expected to remain strong; EV demand anticipated to revive in coming quarters.

• Margin improvement expected as power cost issues resolve and trading mix normalizes; Q1 and Q4 of last year seen as margin troughs.

• CapEx for FY26 projected at INR 1,200–1,300 crore, with INR 800–900 crore allocated to new energy projects.

• Ambitious capex plan of INR 95 Bn for Giga Corridor in Telangana, targeting 16 GWh cell capacity by FY30.

• Export growth may remain subdued for 1–2 quarters but is expected to recover with market expansion.