Company overview

Amara Raja Batteries Limited (NSE:AMARAJABAT), the flagship company of the Amara Raja Group, is the technology leader and is one of the largest manufacturers of lead-acid batteries for both industrial and automotive applications in the Indian storage battery industry.1

ARBL has prestigious original equipment manufacturers like Maruti Suzuki India Limited, Hyundai Motors India Limited, Ford India Limited, Tata Motors Limited, Mahindra and Mahindra Limited, Honda Cars India Limited, Renault Nissan, Honda Motorcycles & Scooters India Private Ltd, Royal Enfield, Bajaj Auto Ltd, and many more as its clients. The Company's Industrial and Automotive batteries are exported to 32 countries across the globe.

In India, Amara Raja is the preferred supplier to major telecom service providers, Telecom equipment manufacturers, UPS sector (OEM & Replacement), Indian Railways and to Power, Oil & Gas among other industry segments.

Manufacturing Facilities

Amara Raja Batteries Limited manufacturing facilities are equipped with state-of-the-art machines and technology. Each plant is designed to improve shop floor efficiencies by adopting globally recognised concepts such as Lean Six Sigma, 5S and Quality Circle projects. The manufacturing facilities have imbibed low-cost automation to reduce operator fatigue which helps in improving product quality and person productivity. The company's World-Class integrated manufacturing facilities are constantly evolving and are ever ready to adopt the latest technological advancements. The company's in-house R & D centre, which is recognised by Government of India, ensures constant innovation and best in class products.2

The battery plants are located at Karakambadi and Amara Raja Growth Corridor(ARGC) in Chittoor District, Andhra Pradesh, India. The Karakambadi manufacturing facility consists of three plants (4 Wheeler, 2 Wheeler and LVRLA). While the ARGC facility consists of four plants (4 Wheeler, 2 Wheeler, Tubular and MVRLA). Together these plants contribute to the growing volumes of Amara Raja Batteries Ltd.

Business Overview

Automotive Batteries

Amara Raja Automotive Batteries offers a wide range of battery solutions in Passenger Vehicles, Three Wheelers, Two Wheelers, Commercial Vehicles, Farm Vehicles, and Home UPS/Inverters. Amara Raja Batteries Limited(ARBL) is the first company to manufacture Valve Regulated Lead-Acid (VRLA) batteries in India. They are engineered to provide performance reliability and consistency over the life of the product and they offer a long battery life with minimal maintenance in most demanding applications.3

Amara Raja Automotive Batteries are built to the highest competence in its class. The flagship brand of Amara Raja Batteries, Amaron, is well known for its Zero Maintenance, Extended Warranty, High Cranking Power and Enhanced Safety. The company's products are manufactured at its ISO/TS-16949, ISO-14001 and BH OHSAS-18001 certified manufacturing facilities in Tirupati. The epitome of quality, the ISO:9001 certified ARBL manufacturing plants render batteries with Higher cyclic life, Superior discharge performance, Lower self-discharge rates, explosion resistant, factory charged and eco-friendly batteries ARBL the most preferred battery manufacturing company in over 32 countries across the globe.

Industrial Batteries

Amara Raja Industrial Batteries offers a broad range of battery solutions in segments like UPS, Telecom, Railways, Defence and Motive. Amara Raja Batteries Limited(ARBL) is the first company to manufacture Valve Regulated Lead-Acid(VRLA) batteries in India. They are engineered to provide the performance reliability and consistency over the life of the product and they offer a long battery life with minimal maintenance. The VRLA products fit virtually anywhere and provide superior performance in the most demanding applications.4

Amara Raja Industrial Batteries are built to the highest competence in its class. They are fail-safe and fool-proof battery technology manufactured at its premium manufacturing facility. The epitome of quality. an ISO:9001 certified ARBL manufacturing plant render batteries with Higher cyclic life, Superior discharge performance, Lower self-discharge rates, Explosion resistant, Factory charged and Eco-friendly batteries with a floating life of 10 plus years making ARBL, among the most preferred battery manufacturing company in over 32 countries across the globe.


  • UPS
  • Telecom
  • Solar
  • Railways
  • Motive
  • International Operations
  • Defence


  • PowerStack
  • AMARON Brute
  • AMARON Solar
  • AMARON Quanta S-XEL

Industry Overview

The lead-acid battery industry has been in existence for more than 150 years, but the ubiquitous technology displays remarkable traction even today.5

With a proven arrangement for reliable and low-cost energy storage, lead-acid battery plays an important role in its day-to-day life.

Growth in the lead-acid battery market is led by increasing industrialization and urbanization, rising inclination towards green energy sources. There has been significant technological advancements to push the performance boundaries of lead acid batteries enabling their deployment in new and merging application segments. While lithium ion batteries have built a remarkable presence in EVs and grid scale energy storage application, lead-acid batteries continue to stay ahead in terms of production costs, adoption and recycling – lead-acid batteries are 99% recyclable – making them the biggest contender for affordable energy storage solutions.

The Indian Lead acid battery market is about $5bn in FY20 and is likely to de-grow in FY21 due to Covid19 impact. While the post COVID19 market rebound in after market segment is expected to be sharp, the OE de-growth over last several quarters will have a dampening impact in the medium term. The 5 year CAGR upto FY25 is expected to be in the range of 5-7% largely determined by the speed and scale of auto OE recovery.

With developments in the packaging of batteries and their construction, the durability and storage capacities of lead-acid batteries have improved considerably, presenting opportunities in few other emerging sectors like renewable energy.

India is planning to diversify its energy sources in addition to its target of providing 24x7 electricity to every citizen by making large increments in renewable energy generation capacities. This is estimated to be a significant driver for the lead-acid battery market.

Stationary lead-acid batteries are more efficient in storage of energy obtained from renewable sources like wind and solar and are more suitable installations in offshore and onshore platforms to store, supply and direct electric power as per requirements.

The sectoral structure

The Indian lead-acid battery industry is split equally between the automotive segment and the nonautomotive segment. The industry is divided into three segments: (a) Organized segment – controlled by five manufacturers, (b) SME segment and (c) SSI segment. Given the high share of replacement demand for sectors like automotive, home inverter, UPS and traction, the share of unorganized/semiorganized players is high. To beat the increasing competition, the organized players are promoting more and more entry-level brands at competitive pricing and shorter warranty periods and are expanding their distribution network in the semi-urban and rural markets. This should help raise their share in the overall battery market.

Business Segments

Automotive Battery division

Amaron, the flagship Amara Raja offerings that have transformed the automotive battery space in India.

The Tirupati and Chittoor manufacturing facilities are benchmarked to the ISO/IATF 16949, ISO 14001, OHSAS 18001 and EnMS 50001 standards.

The iconic Amaron and PowerZone range finds application in passenger vehicles, commercial vehicles, tractors, three-wheelers and twowheelers and caters to OEs and the aftermarket segments. The automotive battery division also produces home UPS batteries.

Over the years, Amara Raja has set up an entrenched distribution network comprising 30,000- plus Amaron and PowerZone retailers for a pan-India reach. This distribution edge has helped the Company sustain its competitive dominance in the aftermarket segment.

Passenger vehicles

India was the favourite destination of multinational car manufacturers before the slowdown. The annual sales of passenger vehicles were increasing consistently through the last five years. India was expected to overtake Japan and Germany and emerge as the third-largest global car market after the US and China. But the slowdown in the automobile sector has changed the scenario. The downslide for this segment started in July 2018 and continued ever since.

Sales of passenger vehicles, comprising cars, utility vehicles and vans, suffered a 17.8% degrowth visà-vis the 2018-19 sales. According to SIAM, cumulative PV sales in 2019- 20 stood at 2,775,679 units, dipping below the 3-million-unit mark for the first time since 2016-17. While passenger car volumes slipped over 23%, utility vehicle sales grew by 0.48% on the back of by launches like the Kia Seltos and MG Hector.

Worryingly, 2019-20 sales were also down on 2015-16 sales figures, reflecting a 5-year low. While the buyer sentiment has been low since the beginning of 2018-19, the switch to BS-VI emission norms on April 1, 2020 brought its own set of complications which hampered sales significantly.

The Covid-19 pandemic and the related lockdowns at the tail-end of 2019-20 only compounded the grave situation. March, traditionally a month of strong demand, saw sales nosedive 51% from the same period a year ago.

Going forward: The prospects for the current year, in terms of new vehicle sales, do not appear encouraging owing to the fast spreading pandemic and the extended lockdowns imposed to contain this disease. The resultant job losses, enterprise shutdowns and salary cuts have significantly tarnished customer confidence. As such discretionary expenses, which also covers purchase of a passenger vehicle, will be sent to the backburner for some time. It is expected that green shoots of demand growth should emerge towards the later half of the current financial year.

Aftermarket: In India, about 2.5–3 million vehicles are sold every year over the last 4-5 years. This provides a large and growing aftermarket opportunity for batteries. In addition to being a large market, it is a lucrative space for the following reasons:

  • B2C nature of business
  • Better pricing power with diffused customer base
  • Demand for higher quality and performance

With cities getting increasingly congested, growing vehicle population and the government imposing emission norms, the start-stop-start action of vehicles is expected to increase which will strengthen the demand for quality batteries in the aftermarket segment. India is the fifth largest car market in the world . India’s continuous rise in the league will strengthen the aftermarket segment battery demand over the medium term.

In the immediate near-term, battery makers could witness replacement demand driven by an upsurge in the aftermarket demand for replacement of old and discharged batteries.


The shaky macro-economic environment in the country saw two-wheeler volumes falling by 17.76% from 21.18 million units in 2018-19 to 17.42 million in 2019-20. Exports provided a silver lining to the prevailing gloom growing by more than 7% over the previous year.

Recovery in markets such as Africa, Latin America, Central America, Africa and Southeast Asia has helped Indian two-wheeler companies to expand their presence further and increase their export volumes.

The domestic electric two-wheeler segment had a successful 2019-20. Electric two-wheeler sales in India in 2019-20 registered a growth of 20.6%, compared to the 2018-19 figures.

Going forward: Credible sources suggest that the two-wheeler market, in terms of new vehicle sales, will be faster on the rebound. This optimism is based on the presumption that the average Indian who hitherto used public or share transport for this daily movement would now, owing to safety and health compulsions due to the Covid-19 pandemic, shift to a twowheeler. Low interest rates could lure him into making the shift.

Aftermarket: India is one of the largest two-wheeler market in the world, adding more than 15 million vehicles annually to the wheelson-the-street inventory for the last 3-4 years. Between 2012 and 2018, over 124 million bikes were sold in the country, creating a huge aftermarket opportunity.


The Union government is trying to encourage the adoption of electric mobility to reduce the dependence on crude oil imports and bring down pollution across cities. With its cleaner carbon footprint and reduced localised pollution, e-mobility can serve as a solution.

Though the Indian Government laid out a broad plan in 2013 with the ‘National Electric Mobility Mission Plan (NEMMP) 2020’, e-mobility has seen better traction in the recent times with the Phase 2 of the FAME (Faster Adoption and Manufacturing of Hybrid and Electric vehicles) rolled out on 1st April 2019. The second phase aims at boosting electric mobility and increasing the number of electric vehicles in commercial fleets. This includes buses using EV technology, electric, plug-in hybrid, and strong hybrid four-wheelers as well as electric three-wheelers including e-rickshaws and electric two-wheelers. It also focuses on the establishment of charging infrastructure across multiple cities.


The Indian electric rickshaw market has witnessed significant growth in recently, owing to rising environmental awareness, government incentives and implementation of stringent regulations to curb environmental degradation.

Analysing the dominance of electric rickshaws, which cover 80% of the EV market in India, Frost and Sullivan has said in a recent report that e-rickshaws in India will grow to 1 million units by FY2025 from 0.4 million in FY2019. Around 72% of the electric rickshaws plying on Indian roads providing last mile mobility solutions to in Tier II and III cities, are 0-2 years old and approximately 98% of them are powered by lead acid batteries. It presents an interesting opportunity for it.

Business strategy

The automotive battery business has developed preferred brands like Amaron and PowerZone. Both the brands have garnered significant market share and continue to acquire more. The brands operate in market segments of automotive, two-wheeler and inverter batteries.

The automotive battery business has drawn up a roadmap designed to sustain its growth momentum over the medium term. It covers geographic expansion, new products and applications, and new technologies and processes.

Industrial Battery Division

The Company largely handles the business on B2B basis to serve customers like telecom operators, tower companies, UPS OEMs, power utilities and solar integrators. The Company has a strong distribution network covering 130 AQuA channel partners across the nation to serve the replacement markets of UPS batteries. The sales team is aptly supported by a network of 120 SWEAR service partners in addition to its own personnel.

Batteries for telecom sector

India’s telecom sector, which has been grappling with huge debts and massive regulatory headwinds for the past few years, has received investments of more than C1.42 lakh crore in the last six months. All the four mobile operators have received some form of funding, which indicates that the investor confidence has not waned out.

More than 50% of the Indian market is still not connected by data services. Those who have access to the internet, are consuming data like never before. The Covid-19 pandemic and the consequent lockdown gave a new lease of life to the industry with a massive surge in data usage. Millions were able to buy essential commodities, make financial transactions, watch movies, catch up with news, and work from home only because of reliable telecom networks.

Telecom networks are clearly at the heart of Amara Raja’s digital future. While most sectors are saddled by terrible slump in business, telecom is slated to grow by 15-20% even in the midst of the economic slowdown. As data usage skyrockets, focus to improve rural coverage and launch of 5G can increase the power requirement at towers.

Batteries for UPS applications

India’s UPS market size is around $1 billion and it is expected to continue growing because of the digital transformation sweeping through the country.

Data Centers: A move toward a connected, inclusive digital economy means more and more data is being generated across various platforms as well as accessed by more people using mobile technology. Data centers have started making big strides with the spurt in data consumption. The cloud computing and edge data center technologies are increasingly being adopted across businesses as well as consumers adding to the demand for batteries.

Mobile telephony: Improved device penetration, affordable data tariff plans and increased data-intensive content such as videos are driving the growth of mobile telephony in India. Mobile data traffic is growing as more Indians spend time streaming videos, which is expected to account for 75% of the overall mobile traffic by 2024. Estimates suggest that the total mobile data traffic per month will record a CAGR of 23% from 4.6 exabytes in 2018 to 16 exabytes in 2024.

India’s IT industry contributed around 7.7% to the country’s GDP and is expected to contribute 10% to the GDP by 2025.

The government initiative to computerize its various departments coupled with the National e-Governance Plan is expected to boost the demand for low-end UPS systems. Infrastructure push on Airport expansions, Metro Rail, smart cities, and banking, financial services and insurance (BFSI) are adding fuel to the UPS business growth in India.

Manufacturing Sector: with increased impetus to local manufacturing and intensifying focus on pharma, chemical and food processing sectors, India is expected to rank among the top three growth economies and manufacturing destinations of the world.

Batteries for Solar and Energy Storage Sector

The government’s earlier RE targets of 175GW which was further enhanced to 450 GW by 2030 as announced by the Hon’ble Prime Minister will significantly drive the demand for energy storage systems in India.

Other drivers like one of the lowest RE tariffs in the world, reforms in power tariffs, Renewable Purchase Obligations (RPO), solar parks and mini grids promise a significant jump in demand for battery energy storage.

Increased renewable component in overall energy generation mix of India necessitates the need for frequency stabilization and also handle peak demand in morning and evening hours, driving the need for energy storage. The recent changes in the tender specifications call for peak shaving (2 to 4 hours of back up) in addition to grid stabilization (15 minutes backup) also will drive for bigger energy storage needs.

Behind the meter requirement of energy storage at residential, commercial and industrial locations is expected to witness faster adoption with the likely introduction of differential tariffs will further drive growth in the energy storage needs.

Batteries for motive power

Unlike developed economies, the usage of Fork Lifts/Pallet Trucks in India has been limited owing to traditional practice of usage of labor for goods movement as well as very little adoption of palletization.

However, things are changing, driven by increased labor cost, mechanization of processes and more and more adoption of vertical rise in storage boosting the need for Fork Lifts and Pallet Trucks.

The motive power battery is driven by the needs of the manufacturing sector, warehousing/e-commerce and preference for electric vehicles over their diesel variants specifically in segments like pharma and food processing.

The adoption of electric vehicles for forklift will continue to grow with more and more conversion of diesel vehicles to electric vehicles, adding to the battery requirements. Among most of the emerging regions of the world, the adoption of lift trucks per million people is very low and it is significantly low in India at approximately 10 lift trucks per million as against 273 in China and 693 in North America. This certainly offers a huge legroom for growth in the Indian market.

International markets

Increased preference for Indian engineering products in the global markets and rapid adoption of successful business models of India in segments like telecom (tower companies, fixed energy cost model) UPS (India as a manufacturing base for global markets) and the renewable energy storage are set to offer tremendous opportunities.

Close on the actions initiated by the Chinese government a few years back to ensure HSE measures in manufacturing and reduced play in global requirements of lead acid batteries, India has turned out to be a preferred destination for sourcing, apart from Vietnam. The undeniable fact of India being a significantly large captive user of batteries has worked in its favor in rolling out technologically superior and costcompetitive batteries for global requirements.

Business strategy

Amara Raja industrial batteries continue to be the most preferred choice in industrial batteries and holds a high market share in all segments of business operations. While continuing to grow the business in India, the strategic roadmap of industrial battery business highlights geographic expansion, new applications, new processes and new technologies to emerge as a credible global supplier for energy storage products and services.

Financial Overview

The company’s revenue from operations for the year ending March 31, 2020 had grew to Rs 6,839.46 crores from RS 6,793.11 crores last year registering a marginal growth. The net profit for the year grew to C660.82 crores from Rs 483.49 crores in the previous year, registering a growth of 37%. The Earnings per share (EPS) for the year stood at Rs 38.69 per share, an increase of 37% compared to Rs 28.31 per share for the previous year

The Company’s financial position has shown immense improvement over the years. The net worth as at March 31, 2020 improved to Rs 3,655.61 crores with the net addition of H320.29 to other equity during the year. There is no interest bearing debt as of March 31, 2020. The surplus cash at the year end stood at Rs 32.60 crores. CRISIL had re-affirmed the ratings on the Company’s loan-term bank loan facilities at ‘CRISIL AA+/Stable’ and on the short-term bank facilities at ‘CRISIL A1+.’

Automotive battery business

The headwinds encountered by the automotive sector during second half of financial year 2018-19 continued through entire financial year 2019-20. Both four wheeler (4W) and two wheeler (2W) vehicle production experienced negative growth during 2019-20. This resulted in OEM business in both the application categories, declining in line with new vehicle production, though the share in respective OEMs was maintained.

The performance in aftermarket business, however, remained strong with double digit growth in volumes. This growth was visible in both the 4W and 2W battery segments. Both Amaron ® and PowerZoneTM brands continued to make further inroads in markets across the Country supported by channel expansion initiatives, leading to incremental gain in market share. Addition of new brand and licensing in private label business, provided further fillip to the aftermarket business. The HUPS battery market is witnessing demand stagnation, in line with improvement of overall power situation in the Country. The company's tubular battery business continued its growth, inspite of stagnancy in demand.

The expansion of manufacturing capacity in both 4W and 2W battery product lines is on track though there are some delays in the completion of installations due to Covid-19 pandemic. However, the company is confident that the capacities will be available to meet the market demand.

Industrial battery business

The Industrial Battery Business has improved its performance in financial year 2019-20 compared to previous year despite the year end sales getting impacted due to COVID19 pandemic. The volumes grew in all segments of the business barring telecom segment.

The overall battery potential for telecom segment continue to de-grew for the third year in a row by as much as 25%. As a result the Company’s revenue from telecom segment also de-grew this year. However, due to Company’s product performance and customer relationship management, Company’s market share improved significantly during the year. Towards the second half of the year the Company regained its preferred supplier status at the India’s largest tower company.

During the year the distribution network for small capacity VRLA batteries were strengthened which resulted in significant growth in this business. The tubular batteries which were launched two years ago for rural banking applications also showed good progress.


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Created by Asif Farooqui on 2020/10/12 14:55
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