Amara Raja Energy & Mobility (500008) Q2 24/25 earnings summary

Executive summary

• Consolidated revenue reached INR 3,250 crore in Q2 FY25, up 10% year-over-year, with strong aftermarket and export battery sales; lead-acid battery business contributed INR 2,100 crore and grew 12% year-over-year.

• Four-wheeler battery volumes grew in aftermarket (15%) and exports (20%), while OEM volumes declined 3% year-over-year; two-wheeler battery volumes rose 17%.

• Name change in 2023 to reflect a broader vision in energy and mobility solutions, with foray into new energy business and significant capex for a Giga Corridor in Telangana.

• Unaudited standalone and consolidated financial results for the quarter and half-year ended September 30, 2024, were approved and reviewed by the Board and auditors, with no material misstatements found.

• Interim dividend of ₹5.30 per equity share declared for FY 2024-25, with record date set as November 14, 2024.

Financial highlights

• Q2 FY25 consolidated revenue: INR 3,250.73 crore, up from INR 2,959.72 crore in Q2 FY24; consolidated EBITDA: INR 4,327 Mn (13.3% margin); PAT: INR 2,356 Mn (7.2% margin).

• Standalone revenue from operations for Q2 FY25 was INR 3,135.83 crore, up from INR 2,811.14 crore in Q2 FY24; standalone net profit after tax for Q2 FY25 was INR 240.71 crore.

• Margin dilution of 5.5% on standalone basis, mainly from higher trading revenue; consolidated margin dilution was 1% due to new energy business expenses and lower turnover.

• Trading revenue mix increased by 3% (INR 100-120 crore) over the previous year due to higher traded battery volumes.

• Price increase of 1.5% taken in the aftermarket segment to offset higher lead and alloy prices.

Outlook and guidance

• Margin recovery expected as trading revenue is replaced by in-house tubular battery manufacturing by fiscal year-end; tubular battery plant to commence commercial production by February or March.

• Export business expected to grow at a 15% CAGR over the next 3-4 years, with expansion into Europe and other regions.

• Board approved further capital infusion in subsidiaries to support expansion in advanced cell technologies and gigafactories.

• Significant market share gain opportunity in new energy business, driven by India's electrification demand expected to reach 150 GWh by 2030.

• Policy support and customer pull for EVs expected to drive growth.