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Amara Raja Q4 FY26: Strong top-line, steady lead-acid margins, and a faster pivot to energy storage

Amara Raja Energy and Mobility ended Q4 FY26 with a sharp rebound in headline growth. Consolidated revenue from operations rose 15.5% year on year to INR 3,535.7 crore. EBITDA came in at INR 385.5 crore with a margin of 10.9%. PAT was INR 314.3 crore, helped by an exceptional income linked to an insurance claim settlement.

For the full year FY26, consolidated revenue grew 7.5% to INR 13,814.0 crore. But profitability softened. EBITDA declined to INR 1,497.1 crore and the EBITDA margin fell to 10.8% from 12.6% in FY25. PAT was INR 895.8 crore, down 5.2% year on year. Management attributed the consolidated margin dilution to higher spending on New Energy product development and ramp-up of facilities.

At the operating level, the company remains a lead-acid dominated business. In Q4 FY26, 92% of revenue came from the Lead Acid Battery business, while 8% came from other businesses, primarily New Energy. Over FY26, the segment disclosure in the consolidated financial results shows lead-acid and allied products at INR 13,005.3 crore and New Energy at INR 808.7 crore.

Lead-acid business: growth led by domestic OEMs and home energy

Management commentary on the concall points to a healthy demand environment in domestic automotive and home energy. The company said 4-wheeler OEM volumes grew over 30% in Q4 FY26, and aftermarket volumes grew around 5% to 6% for both 4-wheeler and 2-wheeler categories.

A highlight for the quarter was tubular batteries and home UPS systems, where management reported volume growth of more than 35% with the onset of the season. Importantly, the mix is shifting toward internal manufacturing. Unlike the previous year where tubular batteries were fully traded, management said 70% to 75% of tubular volumes are now produced in-house, with 20% to 25% still traded.

In industrial lead-acid, the company reported growth of around 3% excluding telecom. Telecom lead-acid volumes continue to decline due to the ongoing shift to lithium solutions. Management said the company’s overall market share in telecom remains around 50%, suggesting leadership is being maintained through the chemistry transition.

Margins in lead-acid are under pressure from costs and mix, but management emphasized resilience. They cited inflation in alloys and sulphuric acid, rupee depreciation, and higher freight. A higher OEM mix also diluted margins. To offset this, the company implemented price hikes of around 5% to 6% in domestic automotive during Q4 in tranches.

New Energy: telecom scale-up and a bigger ESS push

The New Energy business is still small in revenue terms, but the operating momentum is more visible than in earlier years. In Q4 FY26, New Energy revenue was about INR 280 crore from the sale of battery packs and chargers.

Telecom continues to be the anchor customer segment. Management said cumulative telecom pack supply crossed 1 GWh during Q4 FY26, with the quarter marking the highest ever telecom supply of over 300 MWh.

The company is also investing heavily in the platform. It has infused INR 1,500 crore into its wholly owned subsidiary Amara Raja Advanced Cell Technologies (ARACT) up to March 2026, including an additional INR 100 crore during Q4.

A meaningful strategic update from management was the increased priority for energy storage systems (ESS). Earlier, the company’s new energy narrative leaned more toward EV. In this concall, management stated that ESS demand has accelerated and the company has launched an accelerated project to construct an ESS integration facility in Divitipally.

Management is aiming to start production for this ESS integration facility by the end of calendar year 2026 with an initial capacity of 5 GWh, and an ultimate capacity of 10 GWh. Separately, the investor presentation also outlines a 5 GWh BESS giga facility with a stated start of production in Q4 FY2027 and a capex outlay of Rs 280 crore.

On profitability, management guided that initial operating margins in BESS could be around 6% to 7% and could improve as scale ramps up.

Capex roadmap: near-term commissioning, medium-term scale

The investor deck and concall together provide a trackable timetable for the company’s new energy manufacturing build-out.

The Customer Qualification Plant (CQP) at Divitipally is under commissioning. The investor presentation indicates full-scale operations are expected in Q2 FY27. Management also stated in the concall that commercial sample deliveries should begin in the next couple of months as trials stabilize.

The first giga cell factory line, Giga 1, is expected to start production in June 2027. Management stated the equipment has been ordered, but also noted that commissioning depends partly on the availability of engineers from China to support the process.

The company also continues to invest in R&D infrastructure through E Positive Energy Labs. Management said the lab is in final commissioning and teams will move in over the next month in a phased manner.

On overall investments, management gave a clear capex range for the coming year. For FY27, the company expects capex of INR 1,500 crore to INR 1,700 crore, split as about INR 400 crore in the Lead Acid business and INR 1,100 crore to INR 1,200 crore in New Energy.

Financial summary

Note: Q4 FY26 includes exceptional income related to an insurance claim; FY26 includes net exceptional income as disclosed in results.

What to watch from here

The near-term investment debate is not about whether lead-acid is viable. Management’s commentary still positions lead-acid as a long runway business, supported by automotive replacement demand and home energy applications. The real debate is how quickly and profitably the New Energy business scales.

Three factors will likely define the next phase. First is execution of the commissioning calendar, especially the Customer Qualification Plant and the early ESS integration facility start. Second is cost competitiveness of domestic cell manufacturing versus imports. Management explicitly acknowledged that matching China’s cost base is difficult and suggested that policy support and scale improvements will be important to bridge the gap. Third is the evolution of customer structures, since some large OEMs are integrating pack assembly and a few are moving into cell manufacturing.

The company’s disclosures provide tangible milestones. CQP full-scale operations expected in Q2 FY27, ESS production targeted around end CY26, and Giga 1 production expected in June 2027. Alongside that, the company is still funding shareholders with dividends, with the board recommending a final dividend of Rs 5.20 per share in addition to an interim dividend of Rs 5.40 per share for FY26.

Closing view

Amara Raja’s Q4 FY26 commentary signals a company balancing two different realities. The lead-acid franchise is still driving volumes, cash generation and market presence. At the same time, management is spending aggressively to build a lithium and storage platform, and is now leaning more into ESS as demand accelerates.

For investors, the key takeaway is that the story has moved from intent to a schedule. The next 12 to 18 months will be measured not just by quarterly volumes in lead-acid, but by whether commissioning, customer qualification and early ESS deliveries happen within the stated time frames, and whether margin dilution stabilizes as New Energy scales.