Amara Raja Energy & Mobility Ltd Q4 FY26 Earnings Call: Cell Line On Track for June 2027, Guides High Single-Digit Lead-Acid Growth

Amara Raja Energy & Mobility Ltd held its Q4 FY26 earnings call on May 25, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline Financial Metrics

• Consolidated Q4 FY26 revenue of Rs.3,530 Cr— +16% YoY, driven by 12% lead-acid battery growth and Rs.280 Cr from new energy (lithium packs/chargers).
• Full-year FY26 consolidated revenue at Rs.13,814 Cr— +7.5% YoY, with lead-acid EBITDA margin of 12.3% (adjusted for lithium trading and captive recycling).
• Automotive OEM volumes surged in Q4 FY26— four-wheeler OEM +30%, aftermarket +5–6% in both 4W and 2W, and tubular batteries +35% (70–75% now in-house manufactured vs. fully traded in prior year).
• Exports contributed 11% of Q4 FY26 revenue— muted due to geopolitical issues, tariffs, and shipping disruptions; market shares held in Middle East, SE Asia, and Africa.
• Lithium business supplied ~1 GWh of telecom packs in FY26— Q4 FY26 alone contributed 300 MWh; cumulative 1 GWh in stationary applications achieved, maintaining market leadership.

Growth, Margins, and Raw Material Pressures

• Lead-acid business guided for high single-digit growth in FY 2026-2027— focus on home energy, new products, and international expansion to improve resilience; tubular batteries posted >30% growth in Q4 FY26.
• Q4 FY26 lead-acid EBITDA margin at 12.3%— despite raw material cost pressures and a higher OEM mix; price increases of 5–6% taken in domestic automotive during Q4 FY26.
• Raw material pressures are significant across the basket— lead and alloys (~70% of RM basket) seeing price increases; plastics (~10% of RM) facing a potential ~40% price increase; rising sulphur (acid), freight, and currency costs.
• Management indicated another 2–3% price increase may be needed— none taken in Q1 FY 2026-2027; the final quantum depends on competitive moves and evolving raw material trends.
• Captive recycling contributed a 0.5% benefit in Q4 FY26— management expects this to sustain, though rising domestic remelted lead (RML) prices are creating additional cost pressure; battery breaking operations expected to stabilize in Q2 FY 2026-2027.
• Medium-term EBITDA margin target of 13–14% reiterated— even with lead at Rs.2,00,000, but time horizon uncertain due to volatility;management acknowledged current under-recoveries.
• CEO Harshavardhana Gourineni sees a long runway for lead-acid over the next 10 years— driven by continued ICE growth, hybridisation, auxiliary batteries, and a large replacement market;no significant risk of capacity redundancy in the near term.

Lithium-Ion Cells, ESS, and BESS Timelines

• First 2 GWh 2170 cylindrical cell line at Giga 1 on track for June 2027 (Q1 FY 2027-2028)— equipment ordered; commissioning depends on Chinese engineers' visas, with some already on site; management expects TQCP learnings to smooth the ramp.
• Customer qualification plant (TQCP) in final commissioning phase— commercial samples expected in Q2 FY 2026-2027; full-scale operations in the coming months (within FY 2026-2027).
• New ESS integration facility in Divitipally commissioned with initial 5 GWh capacity— ultimate capacity of 10 GWh; production start targeted by end of calendar 2026 (within FY 2026-2027), driven by renewable-driven ESS acceleration.
• BESS facility targeting production start in Q4 FY 2026-2027— early operating margins guided at 6–7%, with potential upside from scale expansion; targeting containerized solutions for grid and C&I.
• R&D centre E-Positive Energy Labs in final commissioning— teams to move in during June 2026 (FY 2026-2027) to accelerate technology development programmes.
• Cumulative investment in Amara Raja Advanced Cell Technologies reached Rs.1,500 Cr as of Q4 FY26— capex per GWh has fallen 20–25% from initial $55–60 million per GWh, improving the business case.
• First LFP production not expected before 2028— initial NMC cell capacity planned for FY 2027-2028; LFP guidance pushed to 2028 or later, pending customer program confidence.

Gotion Tie-Up, Government Policy, and Competitive Dynamics

• Gotion technology tie-up is a corporate-to-corporate deal— Amara Raja never sought government approvals in India or China; the partnership faces headwinds from "Chinese government restrictions on technology licensing," with product development now largely driven by in-house teams in India.
• Long-term 16 GWh cell capacity mix shifting— previously 80% EV / 20% ESS, now closer to 2/3 EV and 1/3 ESS, with ESS share potentially higher depending on rollout success; management remains committed to the full 16 GWh.
• Management cited "industry announcements for 290 GWh of cell capacity vs. estimated demand of about half that"— creating an uncertain demand environment; the company believes it cannot match Chinese import costs, with the near-term cost gap at $15–20 per kWh.
• Government mandates such as "ALMM phase 2 in June 2026" may help bridge the cost gap— management hopes these will support domestic cell manufacturing; management also noted "government discussion of localization norms similar to those used to incentivize the solar industry" for stationary storage.
• Most OEMs do not plan to localize cells— except large players like Tata and Ola Electric; management sees the bulk of the cell market remaining open for Amara Raja, though pack assembly is increasingly done in-house by OEMs.
• Vikramaditya Gourineni argued India cannot completely leapfrog from ICE to EV— must accelerate hybrids, supported by "PM's import-reduction goals"; first cell manufacturing plants are just coming online and upstream lithium is not yet localised.
• For BESS business, key success factors include high-quality manufacturing and domestic value addition— favouring established players like Amara Raja over smaller entrants; Luminous business recorded robust growth in UPS, bolstered by data centre demand.

Guidance, Investments, and Long-Term Outlook

• CAPEX guidance of Rs.1,500–1,700 Cr for FY 2027-2028— with Rs.400 Cr allocated to lead-acid and Rs.1,100–1,200 Cr to new energy; cumulative Rs.9,500 Cr total capex planned for the new energy business, returns dependent on scale and cost reduction.
• Potential EBITDA margin of 10–11% and low double-digit ROCE at 8–10 GWh scale— period unspecified for achieving that scale; capex per GWh has already fallen by 20–25% from initial $55–60 million per GWh.
• Lead-acid business guided for high single-digit growth in FY 2026-2027— driven by home energy, new products, and international expansion; medium-term EBITDA target of 13–14% reiterated.
• Company positioning as multi-chemistry, technology-agnostic low-voltage solution provider— developing solutions for SLI, mild/strong hybrid, and auxiliary battery applications; throughput improvements at existing plants supporting volume growth.
• Management remains committed to the full 16 GWh capacity— mix of four-wheeler OEM take-or-pay agreements and captive use for ESS systems; the 2 GWh 2170 cell capacity is based on internal market assessment for two-wheelers.
• Throughput improvements at existing plants, enabled by digital capabilities, supporting volume growth— management expects continued growth across international markets, unlocking capacity from existing investments.