Amara Raja Ener. Q4 FY26 Earnings Call — Analysis (NSE: ARE&M)
Amara Raja Q4FY26 saw 15% YoY consolidated revenue growth driven by 30%+ OEM and tubular volumes, while New Energy crossed 1 GWh cumulative telecom installations and advanced cell manufacturing with CQP commissioning imminent.
The take
FY26 Full Year Consolidated Revenue ₹13,814 Cr ( +7.5% YoY ) . New guidance — FY27 lead acid battery business mid-to-high single digits . New story: New Energy capex super-cycle .
Results
Consolidated revenue ₹3,530 Cr (+15% YoY); Lead Acid EBITDA margin 12.3% (adjusted); New Energy revenue ₹280 Cr (+1.5x YoY).
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Consolidated Revenue | ₹3,530 Cr | +15% | yoy · Q4FY26 |
| Lead Acid Battery Revenue Growth | ~12% | yoy · Q4FY26 | |
| New Energy Revenue | ₹280 Cr | +1.5x | yoy · Q4FY26 |
| Consolidated EBITDA Margin (Standalone) | 11% | point_in_time · Q4FY26 | |
| Lead Acid Adjusted EBITDA Margin | 12.3% | point_in_time · Q4FY26 · adjusted for lithium trading and captive recycling | |
| Full Year Consolidated Revenue | ₹13,814 Cr | +7.5% | yoy · FY26 |
| Full Year Consolidated EBITDA Margin | 10.8% | point_in_time · FY26 | |
| Full Year Lead Acid Operating Margin | 12.2% | point_in_time · FY26 | |
| Capex (Lead Acid, net of insurance) | ₹500 Cr | point_in_time · FY26 | |
| FY27 Capex Guidance | ₹1,500-1,700 Cr | point_in_time · FY27 · ₹400 Cr Lead Acid, ₹1,100-1,200 Cr New Energy |
Guidance
Lead Acid revenue growth expected at mid-to-high single digits in FY27; cell manufacturing Giga 1 on track for June 2027 production start.
What management committed to
- The Customer Qualification Plant (CQP) will start delivering commercial samples to customers in the next couple of months. — Q2FY27
- Giga 1 (2 GWh cell manufacturing line) will start production in June of 2027. — Q1FY28
- BESS integration facility in Divitipally will start production at the end of this calendar year (2026) with initial capacity of 5 GWh. — 5 GWh, Q3FY27
- Lead Acid Battery business revenue growth in FY27 will be in mid-to-high single digits. — mid-to-high single digits, FY27
- FY27 capex will be in the range of ₹1,500 Cr to ₹1,700 Cr, with ~₹400 Cr in Lead Acid and ₹1,100-1,200 Cr in New Energy. — ₹1,500-1,700 Cr, FY27
- At 8-10 GWh scale, New Energy cell manufacturing can achieve EBITDA margin of 10-11%. — 10-11%, at 8-10 GWh scale
- Lead Acid Battery business can achieve 13-14% EBITDA margin on a sustained basis, though timeline is uncertain. — 13-14%, still on the horizon
- Another 2-3% price increase in Lead Acid business may be needed to recover raw material cost pressure. — 2-3%, in the coming periods
- Captive recycling plant battery breaking operations will stabilize in the coming quarter. — Q1FY27
Key themes
New Energy infrastructure build-out and margin defense
How the narrative shifted
- New Energy capex super-cycle: The company is executing a multi-year, multi-facility build-out of cell manufacturing, R&D, and BESS integration infrastructure, positioning as India's first scaled cell manufacturer.
- Gotion partnership de facto stalled: The high-profile Gotion technology licensing deal is effectively frozen due to Chinese government restrictions; the company is pivoting to fully internal R&D for LFP and future chemistries.
- Raw material cost pressure: Lead, alloys, sulfuric acid, plastics, and freight costs are all rising, compounded by rupee depreciation; price increases are being implemented with a lag, squeezing margins.
- ESS overtaking EV in near-term mix: Management is accelerating ESS capacity because stationary storage demand has materialized faster than EV cell demand; the long-term 16 GWh capacity mix is shifting from 80/20 EV/ESS to potentially 2/3 EV, 1/3 ESS.
- Domestic OEM volume surge: 4W and 2W OEM volumes grew >30% YoY, demonstrating strong market share gains and brand pull with vehicle manufacturers in the ICE segment.
- Export headwinds from geopolitics: International volumes are muted due to Middle East instability and tariff barriers in North America; localization strategies are being explored to maintain customer relationships.
Operational commentary
- Customer Qualification Plant (CQP) in final commissioning phase; commercial sample deliveries to customers expected in next couple of months.
- BESS integration facility announced in Divitipally with initial capacity of 5 GWh (ultimate 10 GWh), production targeted by end of calendar year 2026.
- Giga 1 (2 GWh cell manufacturing line) on track for June 2027 production start; equipment ordered, dependent on Chinese engineers for commissioning.
- Captive recycling plant battery breaking operations expected to stabilize in coming quarters, currently only refining operational.
- Lubes business reached scale of ~₹50 Cr per quarter revenue.
- Telecom segment market share remains robust at ~50% despite lead-acid volume decline; transition to lithium compensates.
- International volumes muted due to geopolitical issues and tariff barriers; strategy includes exploring localization to maintain customer support.
- Gotion partnership technology transfer stalled due to Chinese government discouraging tech licensing; internal R&D driving product development.
Analyst Q&A
Q. Where are we in equipment procurement for the 2 GWh cell line?
Equipment has been ordered; the bigger challenge is getting Chinese engineers visas to commission the equipment.
Q. How is the Gotion partnership progressing?
Technology transfer from China is being discouraged by the Chinese government; going forward, product development is largely driven by internal teams in India.
Q. What are the margin expectations for the BESS plant?
Operating margins could be around 6-7% to start, with upside as scale improves; it also acts as a strategic lever for ESS cell manufacturing.
Q. What is the long-term outlook for Lead Acid margins?
Still targeting 13-14% EBITDA margin, but timeline is uncertain given current high volatility in input costs.
Q. Who is the incremental buyer when scaling from 2 to 16 GWh?
The 2 GWh 2170 cell capacity is based on market assessment for 2-wheelers; scaling to 16 GWh will be a mix of 4-wheeler OEMs with take-or-pay-like safeguards and captive ESS offtake.
Research and educational content only. Not investment advice.