In a dramatic turn of events on the stock market, the share price of Amara Raja, one of India’s premier battery manufacturers, has skyrocketed by 20% to reach an all-time high of ₹1,656 apiece.
This surge, which took place during early morning trade, followed a significant announcement: Amara Raja’s wholly-owned subsidiary, Amara Raja Advanced Cell Technologies (ARACT), has signed a crucial technical licensing agreement with GIB EnergyX Slovakia, a subsidiary of Gotion High-Tech Co. Ltd.
Amara raja Landmark licensing agreement with GIB EnergyX Slovakia
This partnership is a game-changer for Amara Raja, enabling them to access Gotion’s advanced LFP (lithium iron phosphate) technology for lithium-ion cells. This agreement isn’t just about technology; it encompasses a comprehensive package that includes access to critical intellectual property.
Support for establishing cutting-edge gigafactory facilities, integration with Gotion’s global supply chain for essential battery materials, and customer technical support for solution deployment.
What this means for Amara Raja
The implications of this deal are profound. For starters, Amara Raja will now be able to manufacture world-class LFP cells in both cylindrical and prismatic forms. This marks a significant technological upgrade and positions Amara Raja at the forefront of the lithium-ion cell manufacturing industry.
Moreover, the technology transfer and service support from GIB EnergyX are set to boost Amara Raja’s efforts in operationalising its gigafactory manufacturing capacities. This is in line with its advanced research and innovation centre, ‘e+ Energy Labs,’ which aims to lead India’s R&D capabilities in this field.
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The role of InoBat and global collaborations
Amara Raja and Gotion are not new to each other. Both companies are shareholders and board members of InoBat, an emerging lithium battery technology company based in Slovakia. InoBat is making waves with its focus on advanced applications like electric aviation and developing a sustainable ‘Cradle to Cradle’ battery value chain.
Last year, Amara Raja announced a substantial investment of ₹9,500 crore to establish the Amara Raja Giga Corridor in Telangana. This strategic move is designed to keep their products competitive and contemporary, benefiting from continuous improvements in cell performance and process efficiencies during the partnership period with Gotion.
Annual performance:
| Sales | 11,708 | 10,388 | 8,697 | 7,149 | 6,839 |
| Other Income | 110 | 92 | 77 | 87 | 55 |
| Total Income | 11,818 | 10,480 | 8,775 | 7,237 | 6,894 |
| Total Expenditure | 10,534 | 9,510 | 8,068 | 6,353 | 6,041 |
| EBIT | 1,284 | 969 | 706 | 883 | 852 |
| Interest | 34 | 22 | 15 | 10 | 12 |
| Tax | 315 | 252 | 178 | 226 | 179 |
| Net Profit | 934 | 694 | 512 | 646 | 660 |
Vikramadithya Gourineni’s vision for the future
Vikramaditya Gourineni, Executive Director of Amara Raja’s Advanced Research & Engineering, expressed immense enthusiasm about the deepening partnership with Gotion and InoBat.
He highlighted the calculated decision to invest in InoBat and the importance of understanding the global new energy landscape. Gourineni is confident that the collaboration with GIB through their ‘Global C2C Alliance’ will reinforce Amara Raja’s technology and supply security, accelerating efforts to establish the Amara Raja Giga Corridor.
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Recent investments and stock performance
On June 20, Amara Raja announced an additional EUR 20 million investment, which includes a 4.5% equity stake in InoBat AS, Norway. This brings their total holding to around 9.32%, including a previous investment of EUR 10 million. This investment is a testament to Amara Raja’s commitment to leading in the lithium battery ecosystem.
The stock market has responded favourably to these strategic moves. Over the last five days, the company’s shares have risen by 17.74%, giving a yearly return of 149.61%.
Impact of political developments
Interestingly, the Amara Raja share price has also seen substantial gains since June 4, following the victory of the Telugu Desam Party (TDP) in the Andhra Pradesh assembly elections. Jayadev Galla, the Managing Director of Amara Raja and a former MP from the TDP, has positioned the company as an influential player in forming the national government. This political development has undoubtedly played a role in the stock’s impressive performance.
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In June alone, Amara Raja shares surged by 40%, leading to an impressive year-to-date return of 103%. This marks the best annual performance for the stock since 2014. From its 2022 low of ₹438, the stock has gained a staggering 278%, currently trading at significantly higher levels.
Looking ahead
The strategic licensing agreement with GIB EnergyX Slovakia marks a pivotal moment for Amara Raja. This deal not only strengthens their technological capabilities but also positions them as a major player in the global lithium battery ecosystem.
With significant investments and a clear vision for the future, Amara Raja is well on its way to achieving new heights.
As the company continues to innovate and expand, it presents a promising opportunity for those looking to invest in the future of energy and mobility.
