What Caused Amara Raja's Q1 Profit to Plummet by 34%?
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Synopsis
Amara Raja Energy and Mobility Limited's latest earnings report reveals a concerning 34% drop in Q1 profit, stirring investor reactions. With revenues showing a modest increase, the company faces challenges due to rising raw material costs and market fluctuations. Explore the implications of these financial results on the future of this energy storage giant.
Key Takeaways
- Net profit down 34% YoY to Rs 165 crore.
- Revenue increased by 4.2% YoY to Rs 3,401 crore.
- EBITDA decreased 17% YoY to Rs 363 crore.
- Rising raw material costs are a significant factor.
- Company expanding into lithium-ion technology.
Mumbai, Aug 14 (NationPress) Amara Raja Energy and Mobility Limited announced a significant 34% decrease in its consolidated net profit for the April–June quarter (Q1 FY26), reporting a profit after tax (PAT) of Rs 165 crore, down from Rs 249 crore during the same timeframe last fiscal year (Q1 FY25).
However, on a sequential basis, profit saw a modest increase of 2%, rising from Rs 161.57 crore in the March 2025 quarter (Q4 FY25), as revealed in the company's stock exchange filing.
Year-on-year (YoY), revenue from operations experienced a 4.2% growth, reaching Rs 3,401 crore, compared to Rs 3,263 crore a year prior.
On a sequential basis, revenue surged 11.1% from Rs 3,060 crore in Q4 FY25.
Total income was reported at Rs 3,419.6 crore, marking a 3.9% increase from the previous fiscal, according to the firm's regulatory filing.
EBITDA fell by 17% YoY to Rs 363 crore, down from Rs 437 crore, with margins declining to 11% from 13.4% in the same quarter last year.
This downturn is attributed mainly to rising raw material costs, which increased 6.4% YoY to Rs 1,800.68 crore, alongside higher purchases of stock-in-trade.
The company's lead-acid batteries and related products generated Rs 3,279.8 crore in revenue, up 4.5% from the previous financial year, while its new energy segment, focusing on lithium-ion and renewable solutions, reported Rs 121.3 crore, down 3.5% YoY.
Tax expenses fell by 25.1% YoY to Rs 64.1 crore, while earnings per share decreased to Rs 9.00 from Rs 13.61 during the same period last fiscal year.
In the wake of this earnings announcement, shares of Amara Raja traded 0.69% lower at Rs 951.35 on the NSE, with the stock losing over 20% in value so far in 2025.
Based in Tirupati, Andhra Pradesh, Amara Raja is recognized as a leading provider of energy storage solutions, particularly through its Amaron and PowerZone brands.
The company is venturing into lithium-ion technology for electric vehicles and renewable energy, while simultaneously catering to both OEM and aftermarket segments across over 50 countries.
Point of View
I emphasize the importance of reviewing financial metrics and market trends that influence major companies like Amara Raja. The reported decline in profits illustrates the pressures faced by the energy sector, driven by fluctuating raw material prices and economic conditions. It's crucial for stakeholders to analyze these developments closely to understand their implications in the broader context of energy solutions.
NationPress
19/08/2025
Frequently Asked Questions
What caused Amara Raja's profit decline?
The profit decline is primarily due to higher raw material costs, which increased by 6.4% YoY, alongside increased purchases of stock-in-trade.
How did revenue perform in Q1 FY26?
Revenue from operations rose by 4.2% YoY, reaching Rs 3,401 crore, and jumped by 11.1% sequentially from Q4 FY25.
What is Amara Raja's focus for future growth?
Amara Raja is expanding its portfolio into lithium-ion technology for electric vehicles and renewable energy solutions.
Where is Amara Raja headquartered?
The company is headquartered in Tirupati, Andhra Pradesh, India.
How did the stock perform after the earnings announcement?
Following the announcement, shares of Amara Raja traded 0.69% lower at Rs 951.35 on the NSE, with the stock losing over 20% in value so far in 2025.
