Amara Raja Energy shares may hit ₹2,100 after a 29% rally in 2 days, as per this analyst
Amara Raja Energy shares may hit ₹2,100 after a 29% rally in 2 days, as per this analyst
Shares of Amara Raja Energy and Mobility Ltd. continued their sharp upward move for the second straight trading session on Wednesday (June 26). The stock surged 8% to hit a record high of ₹1,775.95 apiece on the NSE today. At the current level, the stock has risen about 29% in the last two days.
Speaking to CNBC-Awaaz, Technical Analyst Amit Trivedi said that investors should concentrate on long-term strategies for the Amara Raja Energy stock.
Trivedi advised investors to gradually accumulate the stock between ₹1,500-1,550 level.
Amara Raja Energy shares took nearly nine years to surpass its 2015 peak. Going ahead, the analyst expects levels of ₹2,000-2,100 on the upside.
The battery manufacturing company has recently signed a technical licence agreement (TLA) with Gotion's subsidiary to get access to the lithium-ion phosphate (LFP) technology. This is in sync with Amara's strategy to tap the Li-ion cell manufacturing space.
Following this development, global brokerage firm JPMorgan had assigned a 'Neutral' rating on Amara Raja, with a price target of ₹1,210 per share. The brokerage cited the company's recent technical licensing agreement with Gotion as a positive step.
The partnership is expected to accelerate the development of Amara Raja's gigafactory and instill greater confidence among investors regarding the company's ability to achieve its 16 GWh capacity target.
However, analysts said that further clarity on the details of this technical collaboration is essential for a re-rating.
Domestic brokerage house Kotak Institutional Equities believes the TLA with Gotion will help the company develop LiB batteries and scale up its business, which it had already baked into its assumptions.
The brokerage, however, said that valuations remain expensive at 23 times its financial year 2025 earnings per share estimates amid the terminal risk to the LAB business and the inferior return ratios of the LiB business, given the high capex requirements as well as the commoditized and B2B nature of the business.
Kotak has retained its 'Sell' recommendation, with a price target of ₹1,100 per share on the stock.
At the current price, Amara Raja Energy commands a market capitalisation of ₹31,065 lakh crore.