Amara Raja stock records a steep 5% decline; Nuvama promises growth
So far this year, Amara Raja stock has increased by around 60%, which is much better than the Nifty index's 10% return.
Amara Raja stock records a steep 5% decline
Shares of Amara Raja Energy and Mobility recorded a steep 5% decline after the company registered reduced earnings for the September quarter.
The company recorded a 6.3% rise in the net profit, amounting to ₹ 240.7 crore in Q2FY25. The revenue from operations grew 11.6 per cent YoY to ₹ 3,135.8 crore during the same quarter. In addition, Amara Raja's EBITDA (earnings before interest, tax, depreciation, and amortisation) grew 7.5 per cent YoY to ₹ 440.7 crore at the operating level.
As per Nuvama experts, conventional auto and industrial batteries are projected to promote Amara Raja's core business revenue and EBITDA growth to 9% and 10% from FY24 to FY27. This suggests a positive outlook for India's second-largest lead-acid battery manufacturer.
Currently, the company is heavily targeting the EV sector and plans to begin the production of lithium battery plants using NMC and LFP technologies around 2026-2028. According to Nuvama, these efforts will assist the growth of the company in the longer run and uphold the 'buy' recommendation for the stock with a target price of ₹1,580.
After forming partnerships with original equipment manufacturers like Piaggio and Ather Energy for lithium battery supplies, the brokerage believes that entering and announcing more partnerships will likely boost the stock's performance.
Today at 11:05 AM, Amara Raja's shares were trading about 4% lower at ₹1,321.50 on the National Stock Exchange (NSE). So far this year, the stock has increased by around 60%, which is much better than the Nifty index's 10% return.
Over the past 12 months, the stock has jumped 110%, more than doubling the money investors put in. In comparison, the Nifty index has risen 23% during the same period.
