The electric mobility space is gaining momentum, and battery makers are in focus. The Amara Raja Energy & Mobility share price is down 17% so far in 2025, but is the worst over for the stock? Well, Nuvama Institutional Equities has a ‘Buy’ rating with the target price unchanged at Rs 1,120. This implies an upside of 12.6% from current levels for the Amara Raja Energy share price.
Nuvama on Amara Raja: Margins to expand
The Amara Raja management highlighted that the company the aftermarket auto replacement demand is expected to grow 6–7% for four-wheelers and 10–11% for two-wheelers in FY26.
Talking about the margins, the company stated that the EBITDA margin is likely to improve to 13% in Q4FY26 and 14% in FY27 from 11.5% in Q1FY26. The margins will be led by a lower trading share with the tubular plant coming back on stream, resolution of power cost issues, and commissioning of the new recycling facility. However, near-term margins remain pressured by higher antimony prices and a weaker rupee.
Nuvama on Amara Raja: Lead acid batteries to remain resilient
Amara Raja’s Lead Acid Battery (LAB) business is expected to outpace the industry by 3–5% on market share gains and higher exports. The Indian LAB market is projected to expand from $4.6 billion in FY25 to $ 5.8 billion by FY30, reflecting a modest 5% CAGR. The company’s management expects to outperform the industry by 3–5% driven by market share gains and higher exports. They also reiterated that lead-acid batteries face no significant disruption for the next 15–20 years, particularly in the mobility segment.
Nuvama on Amara Raja: Capacity to increase
Current capacity stands at 40 million units for two-wheelers and 20 million units for passenger vehicles, with the scope to ramp it up to 46 million and 25 million units, respectively, through debottlenecking and process improvements. While no further expansion is planned in the two-wheeler, management indicated potential capacity additions in the four-wheeler.
Nuvama on Amara Raja: Giga cell plant
Nuvama stated that Phase 1 of the lithium cell plant with 1GWh capacity for NMC chemistry to start in the second half of FY27, deferred from the earlier target of FY26, which could be further scaled to 2GWh. Amara Raja’s management also plans to evaluate expansion into LFP chemistry. Furthermore, the capex is estimated to be $50 million per GWh with an asset turnover of 1x based on an assumed cell price of $50/kWh. At 2GWh capacity, the business is expected to achieve EBITDA breakeven with profitability likely at 4GWh.