Amara Raja Energy & Mobility is sharpening its transition strategy, with management outlining an aggressive investment roadmap of around ₹1,000 crore in the next financial year towards its New Energy business, even as the company reported a sharp uptick in quarterly performance.
New Energy Business Doubles Revenue
During Q3, the company’s New Energy vertical delivered revenue of over ₹200 crore, nearly doubling year-on-year and marking the first time the segment crossed the ₹200 crore milestone in a single quarter.
The growth was primarily driven by rising demand for telecom battery packs. The company supplied nearly 250 megawatt hours of telecom packs during the quarter, resulting in stationary capacity utilisation exceeding 80%.
Apart from telecom, the company is now tilting towards battery energy storage systems (BESS), a segment management expects to scale rapidly. Industry demand for energy storage is projected to reach 25–30 gigawatt hours by FY31, presenting a sizeable opportunity.
5 GWh Integrated Energy Storage Plant Approved
In line with this outlook, the Board has approved the setting up of a 5 GWh integrated solutions plant, with an estimated capex of around ₹280 crore. The facility will cater to both grid-scale and commercial & industrial (C&I) energy storage applications and is expected to be operational by the end of FY27.
Management indicated that the company’s energy storage strategy will address two major applications:
- Commercial & Industrial (C&I): Smaller, distributed solutions for industrial and commercial users.
- Grid-Level Storage: Containerised lithium battery solutions integrated with DC blocks for utility-scale deployment.
However, management noted that unit economics in the BESS segment remain fluid, with per kilowatt-hour pricing dependent on lithium pack levels and container configurations, making it premature to define fixed cost benchmarks.
Continued Investment In Lithium Arm
The company also infused ₹200 crore into its lithium subsidiary, Amara Raja Advanced Cell Technologies, during Q3, taking total investments in the arm to ₹1,400 crore so far. The move underlines its commitment to building a domestic lithium cell manufacturing ecosystem.
Margins Hold Steady
On the profitability front, standalone operating margins stood at 11.2% during Q3. Adjusting for lithium telecom battery trading and factoring in operational efficiencies from the lead recycling plant, margins would expand to 12.3%, management said.
Balanced Capex Between Legacy and New Energy
Capital expenditure remains robust across segments. Until December year-to-date, the company spent approximately ₹950 crore across its lead-acid and New Energy businesses, ₹600 crore towards lead-acid and ₹300 crore towards New Energy initiatives.
For FY27, capex allocation is expected to reflect a clear tilt towards energy transition:
- Lead-acid batteries: ₹300–400 crore
- New Energy business: Around ₹1,000 crore
The planned investments signal a calibrated yet decisive shift from legacy lead-acid operations to lithium and storage-led growth, even as the traditional battery business continues to receive maintenance and efficiency-linked capital.