Motilal Oswal's research report on Amara Raja
Amara Raja’s (ARENM) 2QFY26 PAT at INR2.1b came in line with our estimates. Even at the operating level, EBITDA margin was in line with our estimates at 12% (+50bp QoQ). We cut our FY26/FY27 EPS estimates by 6%/8.5% to factor in continued margin pressure in 2Q. While the market is optimistic about ARENM’s Li-ion initiative, we are cautious about its potential returns. We believe the stock, trading at around 23.0x FY26E/19.6x FY27E EPS, appears fairly valued. We reiterate a Neutral rating with a TP of INR940, based on 15x standalone EPS and Investment in New Energy business valued at INR 131 per share.
Outlook
We believe the stock, trading at around 23.0x FY26E/19.6x FY27E EPS, appears fairly valued. Therefore, we reiterate a Neutral rating with a TP of INR940, based on 15x standalone EPS and Investment in New Energy business valued at INR 131 per share.
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