Amara Raja pivots energy strategy after Gotion partnership collapses
The battery maker is shifting its new energy focus toward internal R&D after Chinese government restrictions derailed its partnership with Gotion.
What's new
- Revenue grew 16% YoY to ₹3,530 cr in Q4, supported by OEM and tubular battery volumes.
- The company is adjusting its new energy mix to 67% EV and 33% energy storage.
- Management is moving to internal R&D for battery cells after the Gotion partnership failed.
Why this matters
The collapse of the Gotion partnership forces Amara Raja to shoulder the heavy burden of internal battery cell development. While lead-acid margins remain stable at 12%, the company's ability to execute its new energy pivot without a technology partner is now the primary risk to its FY27 outlook.
What we're watching
- Updates on the timeline for internal battery cell development.
- Whether the new energy mix shift impacts long-term margin targets.
- The impact of cost pressures on lead-acid margins in coming quarters.
The full read
Amara Raja Energy & Mobility reported a 16% year-on-year revenue increase to ₹3,530 crore for the fourth quarter, buoyed by demand for tubular batteries and OEM volumes. While lead-acid margins held at 12%, the company's long-term strategy faces a significant hurdle. The technology partnership with Gotion has collapsed due to Chinese government restrictions, forcing the firm to pivot toward internal R&D for battery cells. Management is also recalibrating its new energy business, shifting from an 80% EV focus to a 67% EV and 33% energy storage mix. To fund these ambitions, the company plans to deploy ₹1,500-1,700 crore in FY27. The open question is whether internal R&D can replicate the technical progress once expected from the Gotion tie-up. The company has maintained its margin resilience for now, but the loss of a key technology partner creates a new, unquantified execution risk for its energy transition.
Questions answered
- Why did the partnership with Gotion end?
- The partnership was disrupted by Chinese government restrictions. Amara Raja must now rely on internal research and development for its battery cell technology.
- How is the company changing its new energy business strategy?
- Management is pivoting its focus from an 80% EV concentration to a split of 67% EV and 33% energy storage.
- What was the financial performance in Q4?
- Amara Raja reported a 16% year-on-year revenue increase to ₹3,530 crore. Lead-acid operating margins held steady at 12%.
- How much does the company plan to spend on capex in FY27?
- The company plans to invest between ₹1,500 crore and ₹1,700 crore in FY27, with the majority of these funds directed toward its new energy business.