What Investors Should Know When Amara Raja and Exide Industries Share Prices Soar

During today’s trading session, Amara Raja Energy & Mobility Ltd and Exide Industries Ltd saw notable increases, as their shares reached all-time highs. Stocks in Amara Raja surged over 20%, hitting an all-time high of Rs 1,655.20 before closing at Rs 1,622.50, or 17.63% higher. With this increase, the past six months have seen an amazing 110% gain. Exide Industries’ shares had a similar surge, rising 8.13% to a record high of Rs 620, before leveling off at Rs 592.45, up 3.32%. Exide’s stock has almost doubled in the last half-year.

Given these equities’ lofty valuations and recent strong increases, market commentators have advised caution. Sharekhan by BNP Paribas’s SVP and Head of Capital Market Strategy, Gaurav Dua, encouraged existing investors to hold onto their holdings but discouraged making new investments at these high levels. “The prices appear expensive after such a rally,” said Dua. Angel One’s Senior Research Analyst Osho Krishan echoed these views, pointing out that Amara Raja and Exide’s technical criteria show they are in the overbought area. He advised investors to ride the wave of success while putting in place trailing stop losses to protect gains in the event of a reversal.

The Indian equity benchmarks rose today, driven mostly by gains in the banking and financial sectors, contributing to the overall favorable performance of the market. More general markets performed differently, with 11 of the 16 NSE-compiled sector indices trading positively. The Nifty Bank and Nifty Financial Services sub-indices, which increased by 0.81% and 0.62%, respectively, did better. The Nifty Metal and Nifty FMCG indices, on the other hand, experienced modest decreases. With 2,161 shares rising and 1,502 decreasing on the BSE, the market breadth was positive.

The previous session saw the net sales of Indian shares by foreign portfolio investors (FPIs) of Rs 653.97 crore, while domestic institutional investors (DIIs) offloaded shares valued at Rs 820.47 crore.

The recent upswing in Amara Raja’s shares was largely caused by the announcement of a technical licensing deal between GIB EnergyX Slovakia, a Gotion High-Tech Co. Ltd. subsidiary, and its wholly-owned subsidiary, Amara Raja Advanced Cell Technologies (ARACT). Thanks to this partnership, ARACT can now produce top-notch lithium iron phosphate (LFP) cells, improving its production capabilities and facilitating integration with Gotion’s extensive worldwide supply chain for essential battery components. This strategic alliance is to support Amara Raja’s endeavors to operationalize its gigafactory manufacturing capabilities and progress its “e+ Energy Labs” research and innovation center.

Political developments, particularly the Telugu Desam Party’s (TDP) triumph in the AP assembly elections, have also boosted Amara Raja’s stock. The party was positioned as a major factor in the formation of the national government thanks in large part to the efforts of Jayadev Galla, the Managing Director of Amara Raja and a former TDP MP. With a 40% increase in June, the stock’s year-to-date gain of 103% is the highest since 2014. The stock has increased by 278% since its 2022 low of Rs 438.

Before making any financial decisions, investors are urged to speak with qualified professionals. The opinions expressed in this article are those of the individual analysts, not Mint.