Amara Raja Energy and Mobility shares have surged over 100 percent since the beginning of the year. On June 25, the stock price jumped 20 percent to an all-time high of Rs 1,656 after the battery manufacturer announced a technical licensing agreement with China-based Gotion High-Tech.
Under this agreement, Gotion High-Tech’s unit, GIB EnergyX, will license its LFP technology for lithium-ion cells to Amara Raja Advanced Cell Technologies Pvt Ltd (ARACT).
This development prompted several brokerages to issue calls on the stock. For instance, JPMorgan assigned a neutral call on Amara Raja with a target of Rs 1,210 per share, highlighting the technical licensing agreement with Gotion as a positive move. This partnership is anticipated to expedite the development of Amara Raja’s gigafactory and increase investor confidence in the company’s ability to meet its 16 GWh capacity target. However, analysts noted that further details of the technical collaboration are necessary for a re-rating.
Gotion is among the top 10 global lithium-ion cell manufacturers, known for its backward integration and technology capabilities.
For the fourth quarter ending March 31, 2024, Amara Raja reported a 61.4 percent year-on-year (YoY) increase in net profit, reaching Rs 229.8 crore. Revenue from operations grew by 19.5 percent to Rs 2,908 crore, up from Rs 2,433.2 crore in the same period the previous year. On the operating level, EBITDA rose by 16.2 percent to Rs 410.4 crore in Q4 FY24, compared to Rs 353.2 crore in Q4 FY23.
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