Why battery maker Amara Raja Energy's shares gained over 4%; details here

Shares of Amara Raja Energy & Mobility gained up to 4.3 per cent at Rs 1,273.75 per share on the BSE in Friday’s early morning deals. Amara Raja share price surged after the company stated that Hyundai Motor India will incorporate AMARON’s AGM (Absorbent Glass Mat) battery technology across its domestic product lineup. 

 

These batteries, used for Starting, Lighting, and Ignition (SLI), will be sourced under HMIL’s existing procurement agreement with Amara Raja Energy & Mobility. 

 

“Hyundai Motor India Limited (HMIL), India’s smart mobility solutions provider, will equip its domestic product line-up with AMARON’s Made-in-India AGM (Absorbent Glass Mat) battery technology. It will be used as an SLI (Starting, Lighting and Ignition) battery and will be procured under HMIL’s existing procurement agreement with Amara Raja Energy & Mobility Limited (ARE&M), a comprehensive solutions provider in the energy and mobility space,” the company said in an exchange filing. 

 

The company said that Hyundai Motor aims to equip its models with the indigenously manufactured AGM batteries in Q4 of FY 2024-2025, making it the first auto OEM in India to use localized AGM technology. The move is in-line with Hyundai Motors dedicated efforts towards localisation and introducing locally sourced innovative technologies for Indian customers. 

 

Amara Raja Energy & Mobility Ltd, formerly known as Amara Raja Batteries Limited, is a technology leader and one of India's largest manufacturers of lead-acid batteries for industrial and automotive applications. The company is a preferred supplier to major telecom service providers, telecom equipment manufacturers, the UPS sector (OEM and replacement), Indian Railways, and industries such as power, oil, and gas.

 

Financially, Amara Raja Energy reported a 6.3 per cent year-on-year (YoY) increase in net profit at Rs 240.7 crore for the second quarter ended September 30, 2024, compared to Rs 226.4 crore in the same quarter of the previous fiscal.  

 

The company’s revenue from operations rose 11.6 per cent to Rs 3,135.8 crore, up from Rs 2,811.1 crore a year ago.  

 

At the operating level, Ebitda grew 7.5 per cent to Rs 440.7 crore in Q2 FY25, compared to Rs 409.8 crore in Q2 FY24. The Ebitda margin stood at 14.1 per cent, slightly lower than 14.6 per cent in the corresponding period last year.  

 

The company has a total market capitalization of Rs 22,448.06 crore. Its shares are trading at a price to earnings multiple of 23.55 times and at an earning per share of Rs 52.07. 

 

At 10:02 AM; the shares of the company were up 0.49 per cent at Rs 1,226.50 a piece. By comparison, the BSE Sensex was trading 0.50 per cent lower at 78,821.29 level.