Buy Amara Raja Energy & Mobility; target of Rs 1377: Sharekhan

Sharekhan's research report on Amara Raja Energy & Mobility

Adjusted EBITDA margin came in line with estimates, while revenue and EBITDA missed the estimates by 6.7% and 6.2%, respectively. Amalgamation of plastics business contributed 0.8% margin in FY24 and tubular battery’s capacity is expected to commence by the end of FY25. Stock trades at P/E multiple of 18.2x and EV/EBITDA multiple of 8.6x its FY26 estimates.

Outlook

We maintain a Buy rating on the stock with revised PT of Rs 1377 on account of expectation of healthy traction in replacement segment and an opportunity to play in the Li-ion cell business.