Amara Raja Q4 revenue up 16% but margins hit by raw material costs
Strong revenue growth tempered by cost pressures and muted exports, with margin recovery hinging on further price hikes.
What management said
- Consolidated revenue ₹3,530 crore, up 16% YoY; lead acid business grew 12%.
- New energy revenue ₹280 crore, up 1.5x YoY; crossed 1 GWh cumulative supply in telecom.
- Price increases of 5-6% taken in Q4; another 2-3% hike likely due to raw material inflation.
The brief
Amara Raja Energy & Mobility reported consolidated Q4 FY26 revenue of ₹3,530 crore, up 16% YoY, driven by lead acid battery growth of 12% and a 1.5x jump in new energy business to ₹280 crore. Lead acid volumes saw OEM growth over 30% in four-wheelers and two-wheelers, but aftermarket grew only 5-6%. Exports remained muted due to geopolitical issues. EBITDA margin on a standalone basis was 11%, while lead acid margins stood at 12.3% after adjusting for lithium trading and captive recycling benefits. Raw material costs, especially alloys and sulphuric acid, rose sharply, prompting price hikes of 5-6% in Q4. Management indicated another 2-3% increase may be needed. CapEx for FY27 is guided at ₹1,500-1,700 crore, with ₹1,100-1,200 crore for new energy. The customer qualification plant is near commissioning, and a 5 GWh ESS integration facility is expected to start production in Q4 FY27. The 2 GWh cell line (Giga1) is set for June 2027. The Gotion partnership is hampered by Chinese restrictions on technology transfer. Margins remain under pressure from input costs and OEM mix, with CFO targeting 13% lead acid margins but no timeline provided.
In their words
“If I adjust for the trading revenue of lithium batteries, then the lead acid battery business has generated an operating margin of 11.6%.”— Y. Delli Babu — CFO
“Our experience in commissioning the CQP has been invaluable and I expect that the learnings are going to help to smooth out the learning curve at Giga1.”— Harsha Vardana Gowri Neni — Executive Director
“The sharing of technology, licensing technology is something that's been largely discouraged by the Chinese government.”— Vikram Aditya Gowri Neni — Executive Director
Summarised from the Amara Raja Energy & Mobility Ltd Q4 2026 earnings-call transcript. View transcript.