Domestic battery industry: Energising Auto Space

Major developments in the battery space indicating better times for the industry going forward.

Amara Raja Energy and Mobility Limited

Amara Raja has announced partnership with Hyundai Motor India Limited (HMIL) to supply Made-in-India Absorbent Glass Mat (AGM) lead acid batteries, marking a significant advancement in localization of advanced battery technology. These AGM batteries, which outperform conventional Complete Maintenance Free (CMF) batteries by approximately 150% in durability tests, will be integrated into Hyundai's domestic product line up by Q4FY25.

AGM batteries offer quick charging, longevity, low self-discharge, minimal maintenance and high-power efficiency, making them suitable for vehicles with ISG (Idle Stop and Go) systems.
Amara Raja is ahead of competition in introducing such batteries for automotive applications.

With healthy growth in the base lead acid battery business and industry beating margins coupled with increasing execution on the Li-On battery front, we have a positive view on the stock.

We have a BUY rating on Amara Raja with a target price of ₹ 2,000, offering a healthy 25%+ return potential.

Exide Industries

Exide Energy Solutions Limited (EESL), a wholly-owned subsidiary of Exide Industries Limited, announced that it has entered into a binding Term Sheet with Hyundai Motor India Limited (HMIL) to establish agreements for the production and supply of battery cells for electric vehicles tailored to the Indian market.

This partnership aims to localize the manufacturing of lithium-iron-phosphate (LFP) batteries, which are essential for enhancing the competitiveness of Hyundai's EV offerings.

Exide Industries has invested ₹3,152 crore in Exide Energy Solutions Limited (EESL), facilitating its growth and the achievement of key milestones, including nearing completion of construction for essential facilities like the main cell building and warehouse.

EESL's recent agreement to onboard large customers aligns with its strategic goals, particularly in light of upcoming EV product launches from Hyundai, positioning the company advantageously within the electric mobility sector.

This is a further development to the already announced association by Exide & Hyundai Motor group in the past.

We have a BUY rating on Exide Industries with a target price of ₹ 570, offering a healthy 25%+ return potential.