Shares of Amara Raja Energy & Mobility Ltd continued their sharp upward move for the second consecutive session in Wednesday's trade. The stock jumped 7.77 per cent to hit an all-time high of Rs 1,774.90. At this price, the scrip has gained 28.68 per cent in just two days.
The battery maker has recently signed a technical licence agreement 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.
Brokerage Sharekhan said a successful command over the LFP technology would make it easy to supply EV battery solutions to electric PV makers.
"Gotion is a global leading player in the battery solution space and its association would help the company gain command of the Li-ion cell technology, which would make it easy to set up its Gigafactory projects. Amara has increased its stake in Norway-based InoBat to 9.32 per cent, which is engaged in research, development and production of batteries for electric vehicles. It has already planned to invest Rs 2,000-2,200 crore in new energy segment next 2 years," the brokerage stated.
Sharekhan has maintained its 'Buy' recommendation for Amara with a revised price target of Rs 1,967 due to healthy traction expectations in the replacement segment and an opportunity to play in the Li-ion cell business.
On technical setup, analysts largely suggested that the stock looked 'expensive', post a steep run-up. The price looked expensive after the kind of rally that the counter has seen over the last four to six months, Gaurav Dua, SVP, Head of Capital Market Strategy at Sharekhan by BNP Paribas, told Business Today TV.
"Those holding can continue with their positions. Fresh investments are not advised at these levels," Dua stated.
Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, shared similar views for Amara Raja. "Investors should refrain from fresh accumulations at these high elevated zones. Those holding can keep trailing the stop losses at higher levels," Krishan stated.
As of March 2024, promoters held a 32.86 per cent stake in the company.