Despite softer-than-expected margins in the June quarter, brokerages remain optimistic about Amara Raja Energy & Mobility’s growth prospects, emphasising its strategic shift towards energy storage technologies and future capacity expansions.
Amara Raja Energy & Mobility’s softer-than-expected margin performance in the June quarter has not shaken broker confidence, with JPMorgan and Nomura both keeping a Neutral stance while lifting their price targets. According to NDTV Profit, the view from both firms is that the market should look past the quarterly miss and focus instead on a likely recovery in the company’s core lead-acid battery business and the longer-term potential of its new energy push.
JPMorgan increased its target price to ₹1,070 from ₹985, saying the quarter was hit by higher brand promotion costs, warranty provisions, manufacturing upgrade spending and elevated freight and fuel expenses. The brokerage said some of those pressures may linger in the near term before easing, but argued that the June quarter may have marked the bottom for margins. Arthneeti also noted that Amara Raja’s revenue rose 20.6% year on year to ₹4,041 crore, while EBITDA increased 5.4% to ₹407 crore and net profit climbed 4.6% to ₹203 crore.
The company’s emerging battery energy storage systems business is increasingly central to the investment case. NDTV Profit reported that JPMorgan sees the planned 5 GWh facility, due to begin operations in the third quarter of FY27, as a potential catalyst, particularly because Amara Raja is prioritising energy storage system cells rather than standard EV cells for now. Scanx, citing the company’s earnings call, said Amara Raja has outlined FY27 capital expenditure of ₹1,500 crore to ₹1,700 crore, with about 70% earmarked for its new energy division, and has set production milestones that include the Giga-1 line in June 2027 and an LFP plant by 2028.
Nomura was similarly constructive, raising its target to ₹1,048 from ₹942 while holding its Neutral rating. The brokerage expects some improvement in lead-acid margins, but said the profitability of the new business will be the key monitorable and the main driver of any future re-rating. Financial Express reported that Nomura sees room for upside as new plants and smelters come on stream, while Moneycontrol said other brokers, including Geojit Financial Services, remain positive on Amara Raja’s longer-term prospects as the company expands beyond its legacy battery franchise.
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