While benchmark equity indices traded lower on Wednesday, the stock of battery manufacturer Amara Raja Energy & Mobility reported a strong rally, just falling short of its upper circuit limit.
The stock surged almost 20 percent on the bourses after reports of the company planning to manufacture cells for electric vehicles from next year.
The scrip opened higher by 1.4 percent at Rs 784.50 on Wednesday compared to its previous close of Rs 773.40 apiece. During trading hours, it further jumped to Rs 927.70, with a gain of 19.9 percent.
This was just shy of the stock’s upper circuit limit of Rs 928.05.
The rally in the stock has come after it remained muted for a long time. Almost all of the stock’s 20 percent return in the last one month has come from today’s surge.
The buying interest in the stock followed a report by The Economic Times that the company is planning to start bulk production of lithium-ion cells for electric vehicles from 2027.
This will make it only the second Indian company to commence domestic cell production after Bhavish Aggarwal’s Ola Electric.
The company will start cell production this year, but these will first be tested by Indian customers for qualification.
Cell production will begin at a megawatt-hour scale, while bulk production at the first gigafactory of 2 GWh will follow in 2027, according to the report.
The cells produced by the company will primarily cater to the electric two-wheeler segment.
To de-risk demand concentration, the company will also supply cells to clients in power tools and garden equipment segments.
Amara Raja has allocated Rs 10,000 crore for building its lithium-ion cell pack and manufacturing capabilities.
With the oil crisis weighing on the prospects of gasoline vehicles and the government promoting electric vehicles through various schemes, the company’s lithium-ion cell bet has garnered strong interest from investors.
