Amara Raja Energy & Mobility Ltd’s shares are currently available at a good valuation. Brokerage house Nuvama believes that buying the stock at current levels is a strong growth opportunity.
While benchmark indices like Sensex and Nifty are near their 52-week highs, there are still some quality stocks offering an opportunity to invest at lower levels. Amara Raja Energy & Mobility Ltd, a battery manufacturing company, is one such stock available at a good valuation right now. Brokerage houses are considering it a good investment at this level due to its strong growth potential.
Amara Raja Energy & Mobility Ltd’s stock is currently trading at ₹966, with a market capitalization of ₹17,940 crores. Over the past year, the stock has fallen by 25% from its 52-week high. It has consolidated within a range of a 3% decline over the last six months. Nuvama, the brokerage firm, recommends buying the stock at this level, citing strong growth potential.
Brokerage Firm’s Buy Rating on Amara Raja
Brokerage firm Nuvama has maintained a buy rating on Amara Raja Energy & Mobility Ltd’s stock, recommending investment. However, Nuvama has slightly lowered the target price from ₹1120 due to margin pressure and weaker revenue forecasts in the near term.
According to the brokerage’s recent analysis of the company’s quarterly results, Amara Raja’s revenue for Q2 FY2025 increased by 8% YoY to ₹3,390 crores, aligning closely with Nuvama’s estimates. Significant growth in the Auto OEM and UPS segments contributed to the increase, although the telecom sector saw a decline.
However, EBITDA dropped by 8% to ₹410 crores due to one-time costs, which was slightly below the estimated ₹420 crores.
Future Growth Outlook
Brokerage firm expects Amara Raja to achieve a 7% revenue CAGR and a 10% EPS CAGR from FY2025 to FY2028. It also highlighted the company’s expansion into the Electric Vehicle (EV) sector, with the lithium cell manufacturing plant expected to start operations in the first half of calendar year 2027. The brokerage has recommended a buy rating with a target price of ₹1,110.
Amara Raja Energy & Mobility Ltd has stable earnings and is a debt-free company. It has a return on equity of 12.3% and a dividend yield of 1.09%.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial or investment advice. Please consult with a qualified financial advisor before making any investment decisions.
