Exide Q2 Results Review - Demand Weakness Hurts Margins: Motilal Oswal

Motilal Oswal Report

The lead acid battery business is experiencing healthy demand momentum across both auto replacement and industrial segments, and Exide Industries Ltd. is expected to emerge as the key beneficiary of the same given its market leadership in most segments.

However, given the significant imminent risk to its core business, Exide has forayed into the manufacturing of lithium ion cells in partnership with S-Volt at a total investment of Rs 60 billion in two phases. While the market appears to be upbeat on Exide’s lithium ion foray, we remain cautious of the returns from the same. We, hence, reiterate our Neutral rating on the stock with a revised target price of Rs 435 (based on 22 times Sep-26E earnings per share).

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