'Add' Exide Industries Shares Maintains Yes Securities Post Q1 Results — Check Target Price

While Exide Industries Ltd.'s LAB business is expected to grow 7-8% CAGR over three-five years, the recent underperformance is linked to concerns around profitability and utilization of LIB given consistent fall in global cell prices.

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Yes Securities Report

Over the mid-long term, ramp-up of lithium-ion battery cell manufacturing and new order wins (in addition to MOU signed with Hyundai group), would be closely watched as the plant is expected to see production ramp-up over FY27.

Several cost savings initiatives such as switch to punch-grid for motorcycles. manufacturing efficiency and change in go to market strategy to support growth and aid margin expansion in base business.

While Exide Industries Ltd.'s LAB business is expected to grow 7-8% CAGR over three-five years, the recent underperformance is linked to concerns around profitability and utilization of LIB given consistent fall in global cell prices.

Maintain Add as Exide Industries trades at 24.7x/22.4x FY26/27 standalone EPS (vs 10-year long period average of ~20x).

We increase FY26/27 EPS by ~4% to factor in for better revenues, cost controls and build revenue/Ebitda/adjusted PAT CAGR of 7.7%/12.5%/16.5% over FY25-27E.

We value Exide Industries at Rs 424/share as we value LAB at Rs 347 (18x Mar-27 EPS + 50% Holdco discount to HDFC Life stake at Rs 37) and value of LIB business at Rs 77/share.

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