ARE&M Q1 FY27 Earnings Call Transcript Released

Amara Raja Energy & Mobility Limited (ARE&M) has released the transcript of its Q1 FY27 earnings conference call, which was held on August 11, 2026. The call featured insights from Mr. Y. Delli Babu, Chief Financial Officer, and Ms. Swajitha Rapeti, Head, Corporate Finance.

During the quarter ended June 30, 2026, the company reported robust consolidated revenue growth of approximately 24%, reaching around ₹4,215 crore. The lead-acid business contributed about 95% of this revenue and grew by approximately 22%. The new energy business showed significant expansion, with revenue increasing by over 70% to approximately ₹209 crore. This growth was driven by sustained volume momentum in both aftermarket and OEM segments for automotive and home energy sectors. Four-wheeler and two-wheeler aftermarket volumes increased by about 15%, while OEM segments saw volume growth of around 24% for four-wheelers and over 35% for two-wheelers year-on-year. The home energy business also grew by over 60%.

Challenges were noted in automotive international revenue, which degrew by about 20% due to a significant volume drop in the Middle East. The company expects to recover these volumes in subsequent quarters. The industrial lead-acid battery business grew by approximately 2%, with UPS batteries growing by about 10%, though telecom lead-acid batteries continue to decline due to the migration to lithium-ion. Lithium-ion telecom volumes grew by approximately 50%, maintaining a market share of over 60% in the telecom segment.

The new energy business also saw strong performance, with EV and telecom packs demonstrating over 50% volume growth year-on-year. ARE&M inaugurated its customer qualification plant in July 2026 and expects its research facility, E Positive, to commence operations in the current quarter. The first gigafactory and the 10-gigawatt-hour BESS factory are on track for their scheduled timelines.

Standalone EBITDA margin for the quarter was around 10.1%, and consolidated margin stood at 9.6%. Margins were impacted by elevated material costs, increased spending on brand promotions (including IPL), and strategic initiatives like Amaron Assist and Factory of the Future. Investments were made in manufacturing excellence, organizational capability, and brand promotion, contributing to margin moderation. Raw material costs, particularly for alloy, sulfuric acid, and poly, increased substantially, leading to a price increase of around 3% in June, with further increases of 2% to 3% planned for August. These cost pressures also led to an increase in warranty provisions.

For FY27, the company estimates a capital expenditure of around ₹1,700 crore, with approximately ₹1,300 crore allocated to the new energy business and the remainder to the lead-acid business, including recycling capex. The Giga 1 plant is expected to commercialize in H1 FY28. In Q1 FY27, capex spending was around ₹450 crore.

Furthermore, on July 18, 2026, the Andhra Pradesh Pollution Control Board revoked the closure order issued against the company on April 30, 2021. The company has withdrawn the writ petition filed before the Honorable High Court of Andhra Pradesh.