August 9, 2024: Indian battery maker Amara Raja Energy (formerly Amara Raja Batteries) posted on August 3, its first quarter earnings. This showed a net profit of Rs249 crore ($29.2m) which was 25.8% higher than last year’s Rs199 crore ($23.7m). Part of this growth was driven by stronger demand in the automotive aftermarket.
As the country’s largest lead-acid battery manufacturer, the firm registered a revenue of Rs3,131 crore ($373m) in the quarter against Rs2,770 crore ($330m) in the comparable quarter last year. For the full year 2023-24, the company reported a net profit of Rs906 crore ($108m) on a revenue of Rs11,260 crore ($1.34bn).
“We have seen good traction from our international operations. This was led by the offtake of our indigenously designed AGM batteries. We are betting big on growing this space in the coming months,” said its executive director for automotive and industrial batteries, Harshavardhana Gourineni.
The company reported last month 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.
“We have seen healthy growth from our chargers and battery packs business and forged partnerships with GIB and Highstar for cell technology and commercialization,’ said Vikramadithya Gourineni, the firm’s executive director (new energy business) in a stock exchange filing.
“The construction of the first phase of our cell manufacturing and advanced energy research and innovation centre is proceeding phase-wise.”
Amara Raja 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.
In an investor call on May 30, the company’s CFO, Delli Babu said: “For fiscal 2025, we may need to spend close to about Rs1,500 crore between lead acid and new energy business. 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 has begun commercial production of localized battery chargers, initially targeting three-wheelers and 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.
