Amara Raja Shares Reach All-Time High

Amara Raja Energy and Mobility shares surged another 10% to hit a fresh all-time high of Rs 1,333 as investors turned bullish on the counter following the Telugu Desam Party's (TDP) massive victory in the local assembly elections, consequently becoming a major player in national politics.

The Political Connection

While the direct impact of TDP's electoral success on Amara Raja may seem unclear, the company's Managing Director, Jay Dev Galla, was a former Member of Parliament (MP) from the party. Galla, a two-time MP and head of the Amara Raja group decided not to contest the Lok Sabha elections this year, citing his desire to focus on his entrepreneurial pursuits.

Strong Financial Performance

In the fiscal fourth quarter, Amara Raja reported a significant 61.4% year-on-year (YoY) increase in net profit, amounting to Rs 230 crore. Meanwhile, its revenue from operations saw a notable climb of 19.5% to Rs 2,908 crore, up from Rs 2,433.2 crore in the year-ago period.

Automotive Battery Demand

According to data from the Society of Indian Automobile Manufacturers (SIAM), the automobile industry's demand for batteries surged during the quarter, fueled by a more than 21% year-on-year rise in vehicle production. Amara Raja's clientele includes major automakers such as Maruti Suzuki, Tata Motors, and Hero MotoCorp.

Robust Growth Across Sectors

Harshavardhana Gourineni, Executive Director of Automotive & Industrial Batteries, highlighted that the company witnessed robust and sustained growth in both the industrial and automotive sectors, resulting in a 10% increase in overall revenue.

Market Performance

At about 12:40 pm, shares of Amara Raja were trading at Rs 1,296, up 6.5% from the previous close on the National Stock Exchange. Amara Raja shares have rallied 52% in the last three months, reflecting investor confidence in the company's prospects.

While the political connection may have influenced the market's optimism, Amara Raja's strong financial performance and the surging demand for automotive batteries have undoubtedly contributed to the stock's record-breaking rally.