Amara Raja Energy and Mobility Ltd, India's second-largest battery manufacturer, has set an ambitious target to significantly increase its global footprint. The Hyderabad-based firm aims to double the contribution of exports to its total revenue, targeting a share of 20-25% within the next five years, with a sharp focus on cracking the competitive North American market.
Betting on Premium Technology for Market Entry
At the heart of this expansion strategy is the company's expertise in Absorbent Glass Mat (AGM) battery technology, a premium segment within the lead-acid battery industry. Harshavardhana Gourineni, Executive Director at Amara Raja, highlighted that the firm is the sole Indian manufacturer supplying AGM batteries to original equipment manufacturers (OEMs).
AGM batteries offer improved battery life and are crucial for supporting start-stop functions in modern vehicles. They are widely used in hybrids, SUVs, pickup trucks, and even serve as auxiliary batteries in electric vehicles. Amara Raja intends to leverage this "technological prowess" to build long-term customer relationships and gain market share in North America, a region where demand for such advanced batteries is growing.
Navigating Tariff Hurdles with Localized Strategy
This push comes despite significant headwinds created by trade policies. For the past ten months, Indian auto components, including batteries, have faced a 25% import duty in the United States, a move by the Trump administration aimed at boosting domestic manufacturing. Gourineni admits this tariff introduces "uncertainty" and affects competitiveness.
However, instead of retreating, Amara Raja is doubling down on a careful, localized approach. The company is investing in building a local distribution network, warehousing, and after-sales support in North America. This "local finishing" strategy allows them to be closer to customers and improve service without immediately committing to full-scale, capital-intensive local manufacturing, which is deemed too risky in the current volatile trade climate.
"We've maintained our customer relationships. We've doubled down on building some distribution strength and getting a bit more local in the US," Gourineni explained. The company is also open to localizing the final stages of battery production, like formation and packaging, if business commitments justify it.
Financial Context and Market Challenges
In the financial year 2024-25, Amara Raja reported total revenues of ₹12,405 crore, with exports contributing 13% to this figure. The North American market is critical for Indian auto parts makers, accounting for nearly a third of the sector's total exports, which reached $23 billion in FY25.
Despite its strategic plans, the company's stock performance has lagged, declining by 19% over the last year, in stark contrast to the Nifty Auto index, which grew by 23%.
Industry experts caution that while the AGM battery segment in North America is large and driven by replacement demand from an ageing vehicle fleet, it is a tough market to penetrate. Harshvardhan Sharma of Nomura Research Institute noted the market is highly consolidated with entrenched players. Success for Indian companies like Amara Raja will depend on execution, focusing on niche segments, and potentially forging local partnerships.
As part of the third generation of the founding Galla family, Gourineni's vision is to diversify the company's geographical presence beyond its strongholds in Africa, West Asia, and Southeast Asia. The ambition is clear: to make international business a much larger pillar of Amara Raja's growth in the coming half-decade.
