Amara Raja Business Model & Capacity Expansion Explained

Amara Raja Energy & Mobility Limited is undergoing a significant operational transition. Amara Raja capacity expansion reflects this shift, as the company accelerates investments across new energy technologies and manufacturing scale. Traditionally known as one of India's leading Lead-Acid Battery (LAB) manufacturers, the company is now expanding into Lithium Packs, Cell Manufacturing, Recycling, and Battery Energy Storage Systems (BESS).

This shift reflects a broader evolution in the energy ecosystem, where mobility electrification, telecom modernization, and renewable energy integration are driving demand for advanced storage solutions.

The Core Business Model: Established Strength with Forward Integration

At the heart of Amara Raja's operations is its large scale Lead- Acid Battery platform.

The company currently operates:

66 million units annualized automotive battery capacity
2.5 billion Ah industrial battery capacity

These facilities cater to automotive OEMs, aftermarket replacement demand, telecom infrastructure, UPS systems, railways, and inverter applications. The lead-acid segment remains operationally important due to its scale, supply chain maturity, and widespread application across industries.

To strengthen material sourcing and operational efficiency, the company has invested in backward integration:

1.5 lakh MTPA Lead Recycling Plant (Phase I & II)
Refinery operations commenced in December 2024
Battery breaking expected from Q4 FY26 / Q1 FY27

This recycling initiative enhances raw material recovery and supports circular economy practices. Additionally, the company reinstated and ramped up its 1.5 million+ batteries per annum Tubular Plant, with full capacity becoming available from Q3 FY26 onward. These developments strengthen its presence in inverter and aftermarket segments.

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Expanding into Lithium Pack Assembly

As part of its diversification strategy, Amara Raja expanded into Lithium Pack Assembly before entering cell manufacturing.

Current installed capacities include:

1.5 GWh Mobility Pack Plant - Divitipally
1.0 GWh Stationary Pack Plant - Tirupati

These facilities are operational and cater to telecom, mobility, and stationary storage applications.

During Q3, the company:

Supplied 250+ MWh telecom packs
Crossed ₹200 crore quarterly revenue milestone in the New Energy segment

The current business model involves procuring lithium cells and assembling them into battery packs. This approach allows faster participation in the lithium ecosystem while infrastructure for cell production is being developed.

Lithium Cell Manufacturing Roadmap

A major structural expansion involves the planned development of lithium cell manufacturing capacity.

The company has outlined:

Target of 16 GWh Lithium Cell Capacity by FY30
Phase 1: 2 GWh capacity (NMC chemistry)
Expected operational timeline: Q1 FY27 / H1 CY2027

To support this initiative:

₹200 crore infused in Q3 into Amara Raja Advanced Cell Technologies (ARACT)

The objective of this roadmap is to establish domestic cell production capabilities supporting both mobility and stationary applications.

Entry into Battery Energy Storage Systems (BESS)

Another major step in the company's expansion strategy is its planned entry into large scale Battery Energy Storage Systems (BESS) manufacturing. The company has approved a 5 GWh BESS gigafactory, with a planned capital expenditure of ₹280 crore and a targeted start of production by the end of FY27 / Q1 FY28.

This move comes at a time when India's BESS demand is projected to reach 25-30 GWh annually by FY31, driven by renewable energy integration, grid stability requirements, and rising peak power demand.

BESS solutions are typically used in grid scale renewable integration, commercial and industrial energy management, and peak load balancing applications. By establishing dedicated BESS manufacturing capacity, the company is positioning itself to participate in the infrastructure layer supporting India's expanding renewable power ecosystem, where energy storage plays a critical role in managing intermittency and ensuring reliability.

Integrated Capacity Architecture

When viewed collectively, Amara Raja's operational structure now spans multiple layers:

Lead-Acid Battery Manufacturing
Lead Recycling (1.5 lakh MTPA)
Lithium Pack Assembly (2.5 GWh combined capacity)
Lithium Cell Manufacturing Roadmap (16 GWh target)
BESS Manufacturing (5 GWh capacity)

This represents a phased expansion across different segments of the energy storage value chain.

Industry Context

The shift toward lithium-based storage and grid-scale BESS solutions aligns with:

Rising electric mobility adoption
Telecom infrastructure modernization
Growth in renewable energy capacity
Policy support for domestic manufacturing

By expanding capacity across these segments, the company is positioning itself to participate in multiple application areas within the broader energy transition landscape.

Conclusion

Amara Raja Energy & Mobility Limited is evolving from a traditional Lead-Acid Battery manufacturer into a broader energy storage platform.

With defined capacities of 66 million units automotive, 2.5 billion Ah industrial, 2.5 GWh lithium pack, a 16 GWh cell target by FY30, and a planned 5 GWh BESS facility, the company is expanding across multiple layers of the storage value chain.

This transformation reflects evolving energy storage requirements in India and demonstrates how traditional battery manufacturers are adapting to technological and infrastructure shifts.