Amara Raja: First Take: Tough Q, again; PAT growth will be key to investor confidence

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

10 August 2026

Amara Raja

First Take: Tough Q, again; PAT growth will be key to

investor confidence

Our First Take: Amara Raja’s standalone revenue growth in 1QFY27 surpassed

our own and street expectations (similar to peer Exide). However, PAT growth was

only ~4.5% YoY (vs. Exide +27% YoY) and fell short of JPMe/Consensus by 79%. EBITDA grew 5% YoY, but EBITDA margin declined ~145bps YoY/80bps

QoQ to 10.1% (vs. Exide at 12.4%). The miss was driven by higher-than-expected

RM costs (gross margin 28.5% vs. Exide 29.5%) & other expenses (12.9% of sales

vs. LY 12%). We await more details (on any potential one-offs), however elevated

RM costs could likely be driven by a combination of adverse mix and impact from

conflict related cost escalation (sulphur, plastics, lead, INR dep). We will also seek

more clarity on volume vs. pricing growth for the quarter following peer Exide’s

commentary of 4-6% price hikes in 1Q. We expect downward consensus earnings

revisions as implied PAT growth for the remainder of FY27 to meet consensus

estimates is 31% (vs. 1Q 4.5% YoY). Amara Raja’s total investment in ARACT

(cell technology subsidiary) is now Rs16.5bn (vs. Exide ~Rs50bn).

Neutral

AMAR.NS, ARENM IN

Price (07 Aug 26):Rs931.70

Price Target (Sep-27):Rs985.00

India Materials & Logistics

Vibhav Zutshi, CFA AC

(91-22) 6157-3585

Amyn Pirani

(91-22) 6157-3583

J.P. Morgan India Private Limited, J.P. Morgan

Tower, Santacruz(E), Mumbai - 400098, SEBI

Registration: INH000001873, (91-22) 6157-3000.

Key Positives

1) Amara Raja’s 21% YoY revenue growth in 1Q is a positive and ahead of peer

Exide (+18% YoY growth).

Key Negatives/Question Marks

EBITDA margin declined 146bps YoY to 10.1%. Clarity on the margin trajectory

will be key.

Likely Changes to Consensus

We expect downward revisions to Street EPS estimates given the miss and steep

ask-rate.

Expected Stock Reaction

Amara Raja stock is trading -3% intraday following the PAT miss (vs. Nifty Auto

+0.4%).

Conference Call Details

Amara Raja’s earnings call is scheduled for 4:00 pm IST on Tuesday, Aug 11.