Amara Raja Energy & Mobility Ltd Q4 FY26 Results Analysis: Revenue Grows 15.5%, Margin Misses Target

Amara Raja Energy & Mobility Ltd's Q4 FY26 numbers came in mixed, with revenue of Rs. 3,535.75 Cr (+15.50% YoY) and PAT growth of +94.50% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

ARE&M delivered 15.5% YoY revenue growth in Q4 FY26, driven by strong New Energy segment performance (78.9% YoY) which exceeded its revenue share target early. However, the core Lead Acid business missed its 8-10% growth guidance (5.35% FY26) due to export headwinds, and overall FY26 pre-exceptional EBITDA margin of 10.8% fell 2.2 pp short of the 13% target. Heavy investment in new energy and recycling capex weighs on cash flows, but positions for potential margin recovery in FY27 as battery breaking and tubular manufacturing ramp up.

Key Investment Insights

Key Positives

• New Energy segment revenue grew 78.9% YoY to Rs.281 Cr, crossing the Rs.200 Cr milestone and reaching 7.9% of quarterly revenue
• Consolidated revenue grew 15.5% YoY to Rs.3,536 Cr in Q4, the strongest quarterly growth in FY26
• Lead Acid segment EBIT margin expanded to 13.2% in Q4 from 7.3% in Q3, driven by seasonal recovery
• Operating cash flow of Rs.1,118 Cr exceeded PAT (1.25x), indicating good earnings quality
• Net worth grew 9.6% YoY to Rs.8,099 Cr and balance sheet remains conservative with near-zero net debt

Risk Factors

• Pre-exceptional EBITDA margin of 10.8% for FY26 missed the 13% run-rate target by 2.2 pp
• Material costs grew 28.5% YoY vs 15.5% revenue growth, reflecting margin pressure from elevated lead prices
• Lead Acid segment FY26 revenue growth of 5.35% missed management's 8-10% guidance due to export headwinds
• New Energy segment remains loss-making with FY26 loss of Rs.135 Cr vs Rs.46 Cr in FY25, though scale is improving
• Free cash flow negative at Rs.223 Cr due to heavy capex of Rs.1,341 Cr