Amara Raja Energy & Mobility Limited has informed stock exchanges about receiving a GST order from tax authorities in Ghaziabad, involving a total demand of approximately ₹2.08 crores. The company disclosed this development in compliance with SEBI listing regulations.

GST Order Details

The Assistant Commissioner, Division VI, Office of the Assistant Commissioner, Ghaziabad, Meerut, Uttar Pradesh, issued the order under Section 73 of CGST/UPGST Act, 2017. The order carries the nature classification of DRC-07/Order.

Nature of Alleged Violation

According to the company's disclosure, the GST authorities have raised concerns regarding reconciliation provided for amounts mentioned in Table 8C of GSTR-9, which was allegedly not considered by the officer during assessment. This relates to Input Tax Credit reconciliation processes under GST compliance requirements.

Company's Response and Impact Assessment

Amara Raja Energy & Mobility has stated that the order will have no impact on its financial, operational, or other activities. The company emphasized that it has not claimed excess Input Tax Credit (ITC) and plans to file an appeal against the order.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Company Secretary and Vice President-Legal Vikas Sabharwal signed the regulatory filing submitted to both NSE and BSE.

The company, formerly known as Amara Raja Batteries Limited, continues to maintain transparency in regulatory disclosures while addressing tax-related matters through appropriate legal channels.

Amara Raja Energy & Mobility Limited (ARE&M) has reported a consolidated revenue of INR 3,467 crores for the second quarter, marking a 6.5% year-over-year growth. The company's performance was primarily driven by robust demand from Original Equipment Manufacturers (OEMs) in the automotive sector.

Lead Acid Business Remains Strong

The lead acid business, which contributes 95% of the company's revenue, grew by 5% year-over-year to INR 3,297 crores. This growth was largely attributed to a significant 30% increase in OEM volumes across both 4-wheeler and 2-wheeler segments. However, aftermarket volumes remained stable due to procurement delays following GST rate revisions.

New Energy Business Shows Promise

ARE&M's New Energy business demonstrated impressive growth, delivering INR 170 crores in revenue, a more than 50% increase compared to the previous year. This growth was supported by increased demand for telecom packs and chargers. The company supplied 150 megawatts in telecom volumes and commenced production of 3-wheeler packs with LFP cells.

Financial Performance

The company's stand-alone operating margins stood at 12%, impacted by warranty expense provisions and Extended Producer Responsibility (EPR) liability provisions totaling INR 35 crores. Excluding these provisions and the impact of lithium telecom batteries, the adjusted operating margin would have been around 12.4%.

Investment in Lithium Subsidiary

ARE&M invested INR 350 crores in Amara Raja Advanced Cell Technologies during the quarter, bringing the total investment in its lithium subsidiary to INR 1,200 crores. This move aligns with the company's strategy to expand its presence in the New Energy sector.

Segment-wise Performance

Future Outlook

The company has outlined a capital expenditure plan of INR 1,400-1,500 crores for the full year, with a major allocation towards the New Energy business. ARE&M aims to increase its New Energy business contribution to 5% of overall revenue by the end of the current fiscal year and potentially 7-8% by FY'27.

Y. Delli Babu, Chief Financial Officer of Amara Raja Energy & Mobility Limited, commented on the results, stating, "We expect the Lead Acid Battery revenue to grow anywhere between 8% to 10% in the next year as well. Our aspiration is to move to a 13% EBITDA margin on a run rate basis and eventually return to our original 14% margin over time."

The company's focus on both traditional lead acid batteries and new energy solutions positions it well to capitalize on the evolving energy storage market in India and internationally.