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Motilal Oswal Report
We attended the Analyst Meet of Amara Raja Energy and Mobility Ltd., followed by a visit to its Telangana gigafactory, showcasing its battery assembly pack unit.
It has committed a capex of Rs 95 billion (announced in FY23) for the next 10 years for the same. The management noted that, in order to achieve a significant scale in the cell manufacturing business, it is critical to have less diversity in the type of cells as margins of 10-11% can be achieved only with capacity utilization of 85-90% of 16 GWh.
We believe that, at 28 times/24 times FY25/26E EPS, the stock is fairly valued for the new energy business. Hence, we maintain a Neutral rating with a target price of Rs 1390, based on 20 times Jun’26E EPS.
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