Exide Industries, a leading player in the automotive battery segment, has witnessed a significant surge in its stock price following a strategic move into the electric vehicle (EV) battery market.
The company’s subsidiary, Exide Energy Solutions, recently inked a Memorandum of Understanding (MOU) with Hyundai and Kia to supply locally produced Lithium Iron Phosphate (LFP) batteries for their EVs in the Indian market. Since the announcement, Exide Industries’ stock has rallied by approximately 45 percent, reflecting investor optimism in the company’s EV supply prospects.
According to industry experts, the demand for lithium-ion batteries in India is projected to witness a substantial increase, with estimates suggesting a growth of nearly 3x-4x from 2025 to 2030. Factors such as strong government policies, regulatory support, and growing market adoption are expected to drive this growth trajectory. To capitalise on this opportunity, Exide Industries has established two subsidiaries, namely Exide Energy Private Limited (EEPL) in 2018 and Exide Energy Solutions Limited (EESL) in 2022. EESL, the newer entity, aims to provide comprehensive end-to-end solutions in the EV battery segment. The company has forged a long-term technical partnership with SVOLT Energy Technology for manufacturing lithium-ion cells, with plans to set up a 12 GWh greenfield project for li-ion cell manufacturing. The first phase of this project, with a capacity of 6 GWh, is anticipated to be completed by 2025, representing a significant investment of ₹6,000 crore.
The exponential growth in the EV market in India, with a compound annual growth rate (CAGR) of nearly 77 percent from FY18 to FY24, further underscores the potential for EV battery suppliers like Exide Industries. With a substantial portion of its revenue derived from the auto industry, Exide Industries is poised to benefit from the burgeoning EV ecosystem in the country. While the company’s financial performance in recent years has been subdued, the renewed investor optimism and improved valuations reflect confidence in Exide Industries’ strategic pivot towards EV battery manufacturing. Analysts expect a robust revenue CAGR of nearly 13 percent during FY24-26, accompanied by an expansion in EBITDA margins. Currently trading at a forward P/E of 30x, Exide Industries’ stock is positioned for further growth as it taps into the expanding EV market in India.
