Amara Raja Energy & Mobility is banking on its new 10 GWh battery storage facility, set for Q3 FY27, to drive immediate revenue. The company targets 5 GWh utilization within six months of launch, distinguishing this grid-scale business from its longer-term battery cell project. With Q1 FY27 revenue up 23.9% year-on-year, investors are monitoring how the company manages margins in the competitive storage market.
Amara Raja Energy & Mobility is positioning its upcoming 10 GWh battery energy storage systems (BESS) plant as a primary driver for near-term revenue. The facility, scheduled to start operations in the third quarter of fiscal year 2027, will focus on assembling lithium iron phosphate (LFP) cells into grid-scale and commercial storage solutions. This development is a distinct strategic move, separate from the company’s separate project to manufacture captive battery cells, which is not expected to reach commercialization until the first half of fiscal year 2028.
Management has set an ambitious target to reach 5 GWh of utilization within six months of the plant’s commissioning. The company is currently seeing demand from Indian engineering, procurement, and construction firms, which management describes as a developing order book. This push into energy storage comes as the company continues to maintain strong performance in its traditional business; for the first quarter of fiscal year 2027, Amara Raja reported revenue of ₹42.15 billion, a 23.9% increase over the previous year, while net profit grew 15.8% to ₹1.91 billion.
Expansion remains capital-intensive, with a total planned expenditure of ₹1,700 crore for fiscal year 2027. A significant portion of this budget is allocated to new energy projects, including the BESS facility and the upcoming gigafactory. While this heavy spending is aimed at capturing market share, it also reflects the company's commitment to transitioning beyond lead-acid batteries.
However, investors should be aware of the specific challenges in the BESS segment. The company has conservatively projected operating margins of 5-6% for this new business, highlighting the intensifying competition in the sector. Furthermore, the reliance on imported LFP cells during the initial phase creates exposure to supply chain costs. The profitability of this division will depend on the company's ability to scale quickly and manage the cost difference between imported cells and domestic requirements. As the BESS plant moves toward its Q3 FY27 launch, the key monitorables for shareholders will be the actual speed of plant commissioning, the ability to secure firm orders, and whether the company can maintain these operating margins amidst sector-wide competition.