Motilal Oswal has maintained a Neutral rating on Amara Raja with a target price of ₹878 in its research report dated July 30, 2026. According to the report, the target price is based on 15x standalone FY28E EPS and ₹92 per share value of the investment in the New Energy business. The brokerage believes all positives are already factored into the current valuation at 21.3x FY27E/17.3x FY28E EPS.
Motilal Oswal visited Amara Raja's Giga Corridor located at Divitipally, Mahbubnagar district, Telangana, which is planned as an integrated lithium-ion battery manufacturing ecosystem. The giga cell factory is expected to commence Phase 1 operations in Q2CY27 with an initial capacity of 2GWh based on NMC chemistry. Additionally, the BESS facility will become operational by the end of CY26 with an initial capacity of 5 GWh, which will later scale up to 10 GWh.
According to the research report, Amara Raja aims to spend ₹15-17 billion in capex in FY27, of which only ₹4 billion would be spent in the LAB business. Given the huge potential of BESS in the country (25-30 GWh by 2031), the company expects this segment to be one of the stronger growth areas. The outlook for LAB business has improved on both the auto and industrial fronts post-GST rate cuts.
Despite the positive developments, Motilal Oswal remains cautious on Amara Raja's foray into the lithium-ion business. The brokerage notes that while the company has significant expansion plans in both lithium-ion and BESS segments, the current valuation already reflects these growth prospects. The Neutral rating reflects a balanced view of the company's diversification strategy into new energy technologies.
