Exide Industries Ltd.'s target price was cut by both Citi and Nuvama after the company's second-quarter profit declined, missing analysts' estimates. The revisions also reflect the brokerages' concerns over moderating demand, higher-than-expected costs, and more cautious earnings growth projections in the near term.
Citi has reduced its target price for Exide Industries to Rs 540 from Rs 610, whereas Nuvama has slashed it by 16% to Rs 460 from Rs 550.
Key reasons behind Citi's target price cut include weaker-than-expected revenue and Ebitda, which were below their expectations, driven by softer demand in key segments. While there was growth in the auto replacement and industrial-UPS and solar segments, the overall revenue miss prompted Citi to revise its revenue and earnings estimates downward. Higher selling, general, and administrative expenses came as a surprise, impacting the company's profitability. Citi pointed to these cost pressures, which were more significant than initially anticipated.
Despite the strong demand in certain segments, such as auto replacement and industrial UPS, Nuvama projects a relatively modest core (lead-acid battery) revenue and Ebitda CAGR of 8% and 10%, respectively, over fiscals 2024 to 2027. "We believe entry into the lithium-ion space would ensure long-term survival/growth," said the brokerage.
Citi lowered its target price multiple for Exide's core lead-acid battery business to 21 times from 22 times for its fiscal 2026 estimates. Despite the weak results, the brokerage maintains a 'buy' rating, but investors are encouraged to wait for further clarity on demand trends and any developments regarding the company’s lithium-ion battery project.
Nuvama also reduced its target price for Exide Industries in response to the weaker-than-expected second-quarter performance, with a 'hold' rating. The brokerage lowered its Ebitda estimates for fiscals 2025 to 2027 by 5–6%, factoring in lower revenue expectations and higher margin pressures.
Exide Industries Q2 Results: Key Highlights
Revenue up 1.8% at Rs 4,450 crore (Bloomberg estimate: Rs 4,549 crore).
Ebitda down 5.5% at Rs 472 crore.
Ebitda margin down 80 basis points at 10.6%.
Net profit down 13.7% at Rs 233 crore (Bloomberg estimate: Rs 259 crore).
Exide Industries Share Price
Shares of the company rose as much as 1.03% to Rs 449.65 apiece and were trading 0.11% higher at Rs 445.55 apiece as of 09:20 a.m. This compares to a 0.33 decline in the NSE Nifty 50 Index.
The stock has risen 37.54% on a year-to-date basis and 66.41% in the last 12 months. The relative strength index was at 37.43.
Out of 23 analysts tracking the company, nine maintain a 'buy' rating, six recommend a 'hold,' and eight suggest a 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 12%.
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