In Thursday’s trading session, the share price of this leading EV stock rose nearly 3%, reaching Rs1,667.5 from its previous close of Rs1,625.35.
This increase was driven by the announcement of a strategic collaboration between Amara Raja Energy & Mobility Ltd. and Ather Energy to develop lithium-ion cells for electric vehicles.
What is the news
According to the exchange filing, Amara Raja Advanced Cell Technologies Private Limited (ARACT), a subsidiary of Amara Raja Energy & Mobility Limited (ARE&M), will sign a Memorandum of Understanding (MoU) with Ather Energy.
The agreement will see Amara Raja and Ather Energy collaborating to develop and supply advanced lithium-ion cells, including NMC (Nickel Manganese Cobalt) and LFP (Lithium Iron Phosphate) chemistries. These cells will be produced locally at Amara Raja’s new Gigafactory in Divitipally, Telangana.
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Agreement Details
Both Amara Raja and Ather have chartered out ambitious plans to tap into this growing market potential. Ather Energy has two manufacturing facilities in Hosur, Tamil Nadu, with one dedicated to battery production and the other to vehicle assembly. Ather also has recently announced the setting up of another plant in Maharashtra.
Amara Raja plans to invest Rs.9,500 crores in a 16 GWh gigafactory in Telangana and will also set up a cutting-edge R&D centre, ‘ePositive Energy Labs,’ in Hyderabad. The company is focused on e-mobility and energy storage, aiming to become a major Indian manufacturer of Li-ion and advanced chemistry cells.
With India focused on clean and green energy, the automotive industry is witnessing a big transition towards electric vehicles (EVs), particularly in the two-wheeler segment. Industry projections point towards EV 2W penetration to reach 40 percent by 2030.
Management Commentary
Vikramaditya Gourineni, Executive Director, Amara Raja Energy & Mobility Ltd said, “We immensely respect Ather’s contribution to electrify mobility in India and their unique approach to overall ecosystem development for sustainable personal mobility solutions.
At Amara Raja, we have significantly progressed in our efforts to build world-class facilities to manufacture cell and battery packs customised for Indian conditions.
Our recent collaboration with Gotion-InoBat will accelerate our efforts towards the same. We are proud to partner with Ather Energy and together we will focus on building market relevant solutions in India’s journey towards indigenisation of Electric Vehicle technologies.”
Recent Agreements and Investments
Amara Raja recently entered into agreements with Gotion-InoBat-Batteries (GIB) and Jiangsu Highstar Battery Manufacturing. The partnership with GIB aims to localise global LFP technology for lithium-ion cells tailored to Indian conditions, while the agreement with Jiangsu Highstar focuses on NMC technology.
In a separate development, Hero MotoCorp invested Rs.124 crore in Ather Energy, increasing its stake by 2.2 percent to over 40 percent. This investment values Ather at Rs.5,636 crore, up from Rs.4,666 crore in Hero’s previous investment last December.
These strategic moves are poised to drive significant growth for both Amara Raja and Ather Energy, enhancing their competitive edge and market presence in the rapidly expanding energy storage and electric mobility sectors.
Financials
For the quarter ending March 2024, Amara Raja Energy and Mobility Ltd. achieved a revenue of Rs.2,797 crores, marking a notable 15 percent increase from Rs.2,433 crores recorded in the same quarter of the previous fiscal year.
Additionally, the company saw a substantial improvement in Profit After Tax (PAT), which surged by 61.7 percent to reach Rs.228 crores in Q4 FY24, up from Rs.141 crores in Q4 FY23.
The share price of Amara Raja reached an intra-day high of Rs.1,665.7 per share on Thursday, increasing 2.5 percent from its previous close.
Company Overview
Amara Raja Energy & Mobility Limited (ARE&M) offers a broad array of solutions and products, including energy storage systems, lithium-ion cell manufacturing, EV chargers, battery pack assembly, and automotive and industrial lubricants. The company is a leading manufacturer of energy storage products for industrial and automotive use in India.
Written by – Siddesh S Raskar
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