Amara Raja Energy & Mobility Limited (ARE&M), one of India’s leading battery and energy storage companies, has announced its Q1 FY25–26 financial results. The numbers reflect a steady growth in revenue but also highlight challenges in profitability, especially in the new energy segment.
📊 Key Financial Performance (Q1 FY25–26)
- Revenue from Operations: ₹3,401 crore (up 4.2% YoY from ₹3,263 crore)
- Total Income: ₹3,420 crore (vs ₹3,293 crore in Q1 FY25)
- Profit Before Tax (PBT): ₹229 crore (down 31.6% YoY from ₹335 crore)
- Net Profit (PAT): ₹165 crore (down 33.8% YoY from ₹249 crore)
- Earnings Per Share (EPS): ₹9.0 (vs ₹13.6 last year)
While revenues continue to grow, rising costs and losses in the new energy business weighed heavily on margins.
🟢 The Good: Strong Core Business and Revenue Growth
- Revenue Growth
The company reported steady growth in its topline, with revenue from operations crossing ₹3,400 crore, supported mainly by its lead-acid battery business. - Lead-Acid Business Performance
The traditional battery segment continues to be the backbone of the company, contributing ₹3,280 crore in revenue and ₹253 crore in profit. This segment ensures stability even during volatile market conditions. - Healthy Financial Position
With reserves of over ₹7,370 crore, Amara Raja maintains a strong balance sheet, giving it the ability to invest aggressively in future technologies. - EPS Stability vs QoQ
EPS of ₹9 this quarter is close to the previous quarter’s ₹8.83, reflecting consistency despite cost pressures.
🔴 The Bad: Profit Pressure and EV Losses
- Declining Net Profit
PAT declined 34% YoY to ₹165 crore due to higher input costs, which rose to ₹1,801 crore compared to ₹1,693 crore in the same period last year. - New Energy Business Loss
The EV and lithium battery division reported a loss of ₹35 crore, compared to a profit of ₹6 crore in Q1 FY25. This clearly shows the early-stage challenges in scaling the new energy business. - Margin Pressure
Rising employee expenses and stock-in-trade purchases also contributed to thinner margins. - EPS Drop YoY
The earnings per share fell from ₹13.6 to ₹9.0, which may dampen short-term investor sentiment.
📌 Segment Insights
- Lead-Acid Batteries & Allied Products
- Revenue: ₹3,280 crore
- Profit: ₹253 crore
- Stable and profitable, remains the cash cow of ARE&M.
- New Energy Business (EV & Lithium Batteries)
- Revenue: ₹121 crore
- Loss: ₹35 crore
- Still in investment and scaling phase, currently pulling down overall profitability.
📈 Shareholding Pattern (June 2025)
- Promoters: 28.06% (unchanged)
- FIIs: ~17.5% (slight decline)
- DIIs: ~23.3% (marginal increase, reflecting institutional confidence)
- Public & Retail: ~31%
Domestic institutions are showing trust with increased holdings, while FIIs reduced their stake marginally due to global market caution.
🧐 Investor Takeaway
Amara Raja Energy & Mobility is walking a fine balance between its cash-rich core lead-acid business and its future-focused EV battery division. While the new energy business is currently a drag on profits, it is a long-term bet aligned with India’s electric mobility transition.
- Short Term: Expect pressure on margins and volatility in stock price due to weak profitability.
- Long Term: Strong reserves, steady core business, and entry into EV battery technology make ARE&M a stock worth accumulating on dips for investors with a 3–5 year horizon.
🌍 Conclusion
The Q1 FY25–26 results of Amara Raja Energy & Mobility tell a story of revenue resilience and profit challenges. Investors should note that while the present numbers look weak on the profit front, the company is making strategic bets on EV and new energy that could pay off in the long run.
Bottom line: Strong revenue, weak profits, and a future worth watching.
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