Amara Raja targets 150% rise in lead acid battery sales, plans expansion

At a time when the battery industry is betting big on electric mobility, the Rs 12,000-crore Amara Raja Group is all set to expand presence in the lead-acid battery segment. It is planning to grow by increasing its manufacturing capacity and raising market presence in West Asia, South-East Asia and Africa, through the organic and inorganic routes.

The company has drawn a roadmap to increase sales in the lead acid segment by 150 per cent from around $1.2 billion now to $3 billion in five years.

Amara Raja has the second-largest lead-acid battery brand Amaron in India and holds around 2.5 per cent market share globally. It has also lined up electric mobility plans by setting up a lithium cell and battery pack manufacturing giga factory in Telangana.

The company had earlier said that it will be investing around Rs 9,500 crore over 10 years for setting up a research and development, and a greenfield manufacturing facility for lithium-ion batteries in Telangana.

“Out of our overall revenue in both lead automotive and industrial business, around 12 per cent comes from international business. We are in over 50 countries and plan to take that to 80 soon (FY28). We would love to concentrate in South-East Asia, Middle-East and Eastern Africa,” said Harshavardhana Gourineni, executive director, automotive and industrial batteries, Amara Raja.

He said the company is looking for an optimistic approach on brownfield expansion and is eyeing mainly West Asia. There is an anti-dumping duty on Indian battery manufacturers in West Asia. During the financial year 2022-23, the company saw its operating income increase by 19 per cent from Rs 8.696 crore last year to Rs 10,386 crore. It posted a strong volume growth of around 13 per cent in automotive batteries and industrial batteries grew around 12 per cent. Also, revenue from electric vehicle (EV) chargers and lithium battery packs surged three fold.

“We understand that there is a transition taking place. We also see that this is a long-tenured sunset. We definitely haven’t seen the peak ICE engine production. We see that there is a clear runway of 10-15 years. We will continue to optimise our capacity,” Gourineni said, when asked about growth in the EV segment.

The company is looking to increase the capacity of four-wheeler batteries from 19 million units now to 24 million units in the next three years. He said the market size of lead acid batteries may increase by 8-9 per cent next year in India. That is, from around $7 billion, it may reach $10 billion in the next five years.

CHARGING THE FUTURE
24 million	Capacity increase in 4-wheeler batteries in three years
Rs 700 crore	Additional investment line up over maintenance capex of Rs 300 crore
$3 billion	Sales target for next five years from $1.2 billion now