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Hidden Gem - Exide Industries

ICICIdirect Research 05 Sep 2025 DISCLAIMER

Exide Industries (EIL) is a part of the duopolistic organised Indian lead acid battery market with presence across automotive & industrial applications. It also has dual presence in Li-On battery space through assembly operations (1.5 GWh, Nexcharge) & Li-On Cell manufacturing venture (12 GWh, Exide Energy Sols). Almost 70% of its Revenue is automotive sales while 30% comes from industrial application.

The company is also expected to benefit from recently announced rationalization of GST tax slabs with all auto parts now subject to 18% tax rate vs, 28% earlier. It will also benefit from pick up in new vehicle sales post GST rate cut given their market leadership in this segment and also from better replacement demand in future

EIL continues to make meaningful progress in its transition to next – generation energy solutions with its greenfield lithium-ion cell manufacturing facility in Bengaluru. The 6 GWH first phase (part of total 12 GWH) remains on track for commissioning by FY26 end, with civil work near completion and procurement in motion. The business is being structured to target EV, grid scale storage, telecom, and other industrial applications, offering diversified revenue base.

Notably, in the recent past, it has entered into a MoU with Hyundai Motors & Kia for strategic co-operation in India's EV market and will focus on development, production & supply of battery cells (LFP chemistry) for Hyundai's electric vehicles dedicated to Indian market.

Therefore, we maintain a positive outlook on Exide, driven by it being the first company in India to commission sizeable greenfield Li-On cell plant and steady demand prospects at its base (lead acid) business.

We have a BUY rating on the stock and have valued it ₹ 480 on SoTP basis.

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