Amara Raja Energy & Mobility Limited

Industrials — Electrical Equipment & Parts · NSE

₹744.35+₹8.05 (+1.09%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Amara Raja Energy & Mobility Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Amara Raja Energy & Mobility Limited, together with its subsidiaries, manufactures and sells lead-acid storage batteries for industrial and automotive applications in India and internationally.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees10,763

Annual revenue₹13,760 Cr

How does it make money?

Turns over ₹13,760 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 10,763 employees supports ₹1.28 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.28 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, HAVELLS INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 14.2% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE17.1%

What is the outlook?

12 analysts covering the stock expect revenue to grow about 12.5% and earnings to grow about 21.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.5%

Est. earnings growth+21.6%

Analysts12

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +33% while net margin moved -8% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+33%

Margin effect-8%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

• ROCE of 14.2% is adequate but not distinctive
• ROCE has been broadly stable
✗ EBITDA margin of 11.4% is thin — little cushion if costs rise
✗ Net margin of 6.3% is slim
• Revenue has compounded at 10.0% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

50/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

74/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

14.8x

3Y Median

19.0x

40 monthly readings · mean 20.7x · range 13.0x–41.7x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 22% below its 3y median of 19.0x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 83% below the peer median of 88.8x.

vs. its own history

Cheap

19.0x median over 40 months · -22%

vs. sector peers

Cheap

88.8x median of 3 peers · -83%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.8x

PEG

2.11

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 102% over 3 years, from ₹201 Cr to ₹406 Cr.
🔴High leverageFinancial
Debt/Equity of 5.01x — earnings must service borrowings before shareholders see anything.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹223 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 3.3 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 22% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 83% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 14.8% to 11.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 5.01x. Interest is payable whether or not the business has a good year.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 9%✓ 11.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹223 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 7% a year✓ 10.0% CAGR
Latest reported year was 23.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 11%✓ 14.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹13,623 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.8x

Cheap

Cheap against the generic band

P/B Ratio

1.68x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹50.37

Profitable

Profitable on a per-share basis

ROE

11.1%

Moderate

Moderate capital efficiency

ROCE

14.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

5.01x

High

High leverage

Revenue Growth (YoY)

23.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

15.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.42%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹223 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

12.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

5.9%

Average

Average margins

Net Margin

6.3%

Average

Average bottom-line conversion

Current Ratio

1.64

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.86

Market-like

Moves roughly in line with the market

52W Range Position

21%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

759.0 / 838.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

27.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹10,339 Cr	₹11,654 Cr	₹12,786 Cr	₹13,760 Cr	+10.0%
EBITDA	₹1,526 Cr	₹1,742 Cr	₹1,686 Cr	₹1,572 Cr	+1.0%
EBITDA Margin	14.8%	14.9%	13.2%	11.4%	—
PAT (Net Profit)	₹731 Cr	₹934 Cr	₹945 Cr	₹896 Cr	+7.0%
EPS	₹39.93	₹51.05	₹51.62	₹48.95	+7.0%
ROE	12.2%	13.7%	12.8%	11.1%	—
ROCE	15.8%	17.7%	16.6%	14.2%	—
Total Debt	₹201 Cr	₹157 Cr	₹261 Cr	₹406 Cr	+26.4%
Free Cash Flow	₹434 Cr	₹395 Cr	₹151 Cr	-₹223 Cr	—

🟢 Revenue has grown at 10.0% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (1.0% a year).

🔴 EBITDA Margin has fallen from 14.8% to 11.4% over 3 years (-3.3 pts).

🟢 PAT (Net Profit) has grown at 7.0% a year over 3 years.

🟢 EPS has grown at 7.0% a year over 3 years.

🔴 ROE has fallen from 12.2% to 11.1% over 3 years (-1.1 pts).

🔴 ROCE has fallen from 15.8% to 14.2% over 3 years (-1.6 pts).

🔴 Total Debt has grown at 26.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹434 Cr to -₹223 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹11,457 Cr

Total Liabilities

₹3,358 Cr

Cash & Equivalents

₹226 Cr

Operating Cash Flow

₹1,118 Cr

Capex

-₹1,341 Cr

Shareholding (proxy)

Institutional Holding

29.1%

Insider Holding

33.3%

Corporate Actions

Dividend Rate

₹10.6

Ex-Dividend Date

27 Jul 2026

Analyst Consensus

Recommendations

4 Buy · 6 Hold · 3 Sell

Target Price (Mean)

₹986.25

+32.5% vs CMP

Target Range

₹810 – ₹1,195

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

2 mixed4 general

What Amara Raja Holders Got Wrong Before The Slide

Simply Wall Street, 15 Oct

Amara Raja Energy and Mobility share price: Buy or Sell

Univest, 07 Sept

Amara Raja Commissions 60 MWh Lithium-Ion Plant at Telangana Giga Corridor

scanx.trade, 14 OctCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Shitij Gandhi recommends buying Amara Raja Energy; RSI, MACD signal more upside

The Economic Times, 03 Aug

Amara Raja Energy soars 12% in 2 days, stock nears 52-week high; here's why

Business Standard, 26 May

Amara Raja Energy & Mobility Ltd (BOM:500008) (Q1 2027) Earnings Call Highlights: Revenue ...

Yahoo Finance, 11 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health · Growth · Profitability · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑