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Lead price inflation and pricing action uncertainty
View Risks →Amara Raja Energy & Mobility Limited — Q2 FY26
Amara Raja's Q2 FY26 consolidated revenue grew 6.5% YoY to ₹3,467 crore, driven by 30% YoY growth in OEM volumes for lead-acid batteries, while aftermarket remained flat due to GST-related disruptions.
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Amara Raja's Q2 FY26 consolidated revenue grew 6.5% YoY to ₹3,467 crore, driven by 30% YoY growth in OEM volumes for lead-acid batteries, while aftermarket remained flat due to GST-related disruptions. The new energy business surged 50% YoY to ₹170 crore, supported by telecom lithium packs and charger orders crossing 5,000 units. Standalone EBITDA margin stood at 12%, impacted by a one-time ₹35 crore EPR provision and higher warranty costs; adjusted for these, margins would be ~13.4%. Management guided for lead-acid revenue growth of 8-10% and a gradual margin recovery to 13% near-term, aided by tubular plant ramp-up and recycling plant commissioning in Q4. Key risk: sustained lead price inflation and competitive pressure in lithium packs could pressure margins.
अमरा राजा की दूसरी तिमाही में कुल आय 6.5% बढ़कर ₹3,467 करोड़ हो गई। इसकी मुख्य वजह लेड-एसिड बैटरियों की OEM बिक्री में 30% का उछाल है, जबकि बाजार में बिक्री GST की वजह से स्थिर रही। नई ऊर्जा कारोबार 50% बढ़कर ₹170 करोड़ हो गया, जिसमें टेलीकॉम लिथियम पैक और 5,000 से अधिक चार्जर के ऑर्डर शामिल हैं। कंपनी का मुनाफा मार्जिन 12% रहा, जो एक बार के ₹35 करोड़ के EPR प्रावधान और बढ़ी वारंटी लागत से प्रभावित हुआ। इसे हटाकर मार्जिन लगभग 13.4% होता। प्रबंधन को लेड-एसिड आय में 8-10% बढ़ोतरी और मार्जिन 13% तक पहुंचने की उम्मीद है। मुख्य जोखिम: लेड की बढ़ती कीमत और लिथियम पैक में प्रतिस्पर्धा।
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OEM volume growth (lead-acid)
30%
+30% YoY
Strong OEM demand across four-wheeler and two-wheeler segments drove 30% YoY volume growth in Q2.
New energy revenue
₹170 crore
+50% YoY
New energy business grew 50% YoY to ₹170 crore, led by telecom lithium packs and charger sales.
Telecom lithium supply
150 MWh
substantial growth
Telecom lithium volumes grew substantially with 150 MWh supplied during the quarter.
Charger order book
5,000+ units
crossed milestone
AC and DC charger order book crossed 5,000 units during Q2.
What Changed vs Last Quarter
NEW
Lead-acid revenue growth of 8-10% for FY26
Management expects lead-acid battery revenue to grow 8-10% in the current fiscal year, driven by OEM and aftermarket recovery.
NEW
EBITDA margin target of 13% near-term, 14% long-term
Management aspires to reach 13% EBITDA margin on a run-rate basis, and eventually return to 14% as efficiency projects and recycling plant contribute.
NEW
New energy revenue share to reach 5% by FY26 end, 7-8% in FY27
New energy business revenue share is expected to move to ~5% by end of FY26 and 7-8% in FY27, driven by pack and cell sales.
UPDATED
Capex of ₹1,400-1,500 crore for FY26
Total capex for FY26 is expected to be ₹1,400-1,500 crore, with major outlay towards new energy business in H2.
DROPPED
Tubular battery plant to reach full capacity in 2-3 months
Commercial production started in July; full capacity of 150,000 batteries per month expected by October 2025.
DROPPED
Customer qualification plant and research lab operational by end of FY26
Equipment orders placed; first gigafactory (1 GWh NMC) expected by end of FY27.
DROPPED
Margins expected to improve from Q2 onwards
Driven by normalization of trading mix, resolution of power cost issues, and stabilization of antimony prices.
NEW RISK
Lead price inflation and pricing action uncertainty
Lead prices have risen ~₹20,000/tonne; management has not yet taken pricing action, which could pressure margins if prices persist.
NEW RISK
Higher warranty provisions may persist for 2-3 quarters
Warranty provisions increased due to higher actual replacements; management expects elevated provisions for at least the next couple of quarters.
NEW RISK
EPR provision may not be fully reversible
A one-time ₹35 crore EPR provision was taken; if scrap collection does not improve, additional costs may arise, though monthly impact is expected to be <₹1 crore.
NEW RISK
Chinese equipment export restrictions could delay cell plant
China's restrictions on equipment for lithium-ion cell manufacturing may cause minor delays, though management is exploring alternatives.
RISK GONE
Export weakness may persist
Export volumes declined 7-8% YoY due to tariff challenges and competitive intensity; management expects recovery only after 1-2 quarters.
RISK GONE
Margin pressure from competitive pricing
Management noted that competitive scenario does not permit further price increases despite input cost pressures, limiting margin recovery.
RISK GONE
Shift from NMC to LFP chemistry could impact cell strategy
Management acknowledged market shift toward LFP, leading to a cautious 1 GWh initial capacity instead of 2 GWh for NMC cells.
RISK GONE
Telecom lead-acid volumes continue to decline
Telecom lead-acid volumes degrew 30% YoY; overall industrial lead-acid volumes declined 3-4% despite UPS growth.
Fast read
Guidance and risk preview
Management expects lead-acid battery revenue to grow 8-10% in the current fiscal year, driven by OEM and aftermarket recovery.
Lead prices have risen ~₹20,000/tonne; management has not yet taken pricing action, which could pressure margins if prices persist.
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