Hold Amara Raja Energy and Mobility; target of Rs 1490: Anand Rathi

Anand Rathi recommended hold rating on Amara Raja Energy and Mobility with a target price of Rs 1490 in its research report dated November 07, 2024.

Broker Research

November 11, 2024 / 09:29 IST

Hold

26 Aug, 2025 12:21

Volume

Todays L/H

Anand Rathi's research report on Amara Raja Energy and Mobility

Belieing our Rs5bn estimate, Amara Raja’s Q2 standalone EBITDA grew 14% y/y to Rs4.4bn due to the lower-than-expected gross margin. The outlook for automotive and industrial demand is bright and Amara is expected to gain share. It plans to set up a lithium-ion cell manufacturing plant, commencing FY27. Larger customer wins and sustainable profit, though, are key challenges as prices fall and technologies change. The stock is fairly valued and factors in the lithium plant opportunity; however, on the recent stock fall, the potential is greater.

Outlook

We introduce FY27e with 11%/12%/13%revenue/EBITDA/PAT growth, and upgrade our rating to a Hold with a higher, Rs1,490, TP, 12x FY27e parent EPS (earlier Rs1,330), and the ARACT NPV (new lithium energy unit) at Rs542/sh.

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