Amara Raja stocks: Amara Raja Energy and Mobility’s stock surged by 20% to reach Rs 1,656, marking an all-time high on June 25. This increase followed the battery manufacturer’s announcement of a technical licensing agreement with Gotion High-Tech, based in China.

Under this agreement, Gotion High-Tech’s subsidiary, GIB EnergyX, will license its LFP technology for lithium-ion cells to Amara Raja Advanced Cell Technologies Pvt Ltd (ARACT).

Amara Raja

Following this development, several brokerage firms have commented on Amara Raja’s stock. JPMorgan, for instance, has given a neutral rating with a target price of Rs 1,210 per share. They view Amara Raja’s recent technical licensing agreement with Gotion as a positive move. This partnership is anticipated to expedite the development of Amara Raja’s gigafactory and bolster investor confidence in the company’s capability to achieve its 16 GWh capacity target.

Analysts emphasize that more clarity on the specifics of this technical collaboration is necessary to potentially reassess the stock’s valuation. -Amara Raja stocks

Investec analysts anticipate that the company’s valuation will catch up following the announcement, potentially enhancing its cell manufacturing capabilities. Gotion, recognized as one of the top 10 global lithium-ion cell manufacturers, boasts significant strengths in both backward integration and technological capabilities.

For the fourth quarter ending March 31, 2024, Amara Raja reported a 61.4% year-on-year increase in net profit, totaling Rs 229.8 crore. Revenue from operations also saw a 19.5% growth to Rs 2,908 crore, up from Rs 2,433.2 cr in the corresponding period of the last year.

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At the operational level, EBITDA climbed by 16.2% to Rs 410.4 crore in the fourth quarter of this fiscal year, compared to Rs 353.2 crore in the 4th quarter of FY23.