Amara Raja reports leap in Q4 profits

Amara Raja reports leap in Q4 profits

Amara Raja reports leap in Q4 profits 150 150 Batteries International

June 7, 2024: Indian battery maker Amara Raja Energy (formerly Amara Raja Batteries) reported on May 28 that its standalone net profit rose nearly 62% to Rs2,285 billion ($27.4 million) in the three months to March 31, helped by strong demand for its batteries from car manufacturers.

The company reported this week that it will invest around Rs 3,000 crore (1 crore equals 10 million rupees) over the next two financial years as capital expenditure in its energy and lead-acid businesses as it plans to participate aggressively in India’s growing EV market.

As the country’s largest lead-acid battery manufacturer, the firm generates 67% of its revenue from the automotive battery sector and is looking to strengthen its existing lead-acid battery operations while diversifying into new energy sectors, including lithium cell manufacturing, battery pack assembly, power electronics, and charger manufacturing.

“For fiscal 2025, we may need to spend close to about Rs1,500 crore between lead acid and new energy business,” the company’s CFO, Delli Babu said in an investor call on May 30. “Lead acid would need about Rs300-Rs400 crore, whereas the new energy business will require Rs1,000-Rs1,100 crore as capex.”

He said capital expenditure for FY26 would be similar. 

One of the cornerstone projects of this investment is the Telangana so-called, ‘giga corridor’ for manufacturing lithium-ion cells and battery packs, which broke ground in May 2023. Over the next decade, the factory will ramp up to a 16GWh cell capacity and a 5GWh battery pack capacity.

The company plans to start commercial operations of the first phase of the factory with a capacity of 2GWh by the end of 2025-2026. The cell capacity of 2GWh is estimated to cost Rs 1,500 crore.

In addition to the lithium-ion projects, Amara Raja is also planning to begin commercial production of localized battery chargers within the current quarter. Initially targeting three-wheelers, the company aims to extend its charger business to include two-wheelers by year-end. The construction of a battery pack facility in Telangana has been completed, with commercial production to start next month.