Eye on EVs, Amara Raja To Reinvent Itself

India’s second-largest battery maker is spending on capex and technology to cater to the nascent but growing EV market.

- PAVAN LALL

SURROUNDED BY WATERFALLS and Amazon forest-like greenery, the Venkateswara Temple, also known as the Balaji Temple of Tirupati, in the southeastern part of Andhra Pradesh draws millions of visitors every year. The sprawling seven hills are held sacred by devotees and revered as the abode of Lord Venkateswara.

In this temple town, just a few kilometers away are not one, but two factories run by Amara Raja Batteries Ltd., India’s second-largest industrial and automotive battery maker.

Amara Raja, with its brand Amaron, is one of the two companies that form a duopoly in the subcontinent when it comes to batteries for trucks, buses, cars and bikes. Exide Industries is the second, and together they control around 80% of the domestic batteries market.

Yet, despite the dominant advantage, companies such as Amara Raja are finding themselves in the middle of an existential challenge. The era of electric vehicles is right here. While market penetration and sales figures for next-generation vehicles are still low, the reality is that to be future-ready manufacturers and OEMs have to make the big-ticket capex right now.

At one level, traditional technology, the lead acid battery business, cannot be abandoned since it is the cash cow, and continues to grow. Amara Raja, for instance, reported a net profit of ₹512 crore on net revenues of ₹8,697 crore in FY22. Despite the rise of EVs, players have to continue making investments in this business, enhancing capacity, and foraying overseas. At the same time, they have to also start making moves in new chemistries, new-age vehicles, and technologies such as hydrogen and sodium.