🪞At a Glance
India’s OG battery king, Exide Industries, may still dominate your UPS and car, but under the hood, it’s been a slow crank. Despite ambitious EV dreams, margin pressures and glacial profit growth have left investors wondering — is this a classic case of brand legacy over business mojo?
🧠 1. What They Do (Other Than Power Your Dad’s Inverter)
Exide makes batteries. All kinds.
- B2C Aftermarket: Two-wheelers, four-wheelers, e-rickshaws, solar, UPS
- OEM Clients: Carmakers, telecoms, railways, submarines (yep, submarines)
- Global Biz: Sells in 60+ countries; only 8% of revenue though
- New Dream: Lithium-ion gigafactory plan (still under construction… like most Indian roads)
So from scooters to submarines — they’ve got voltage in every vehicle.
📦 2. The 5-Year Report Card – Sales: Okay. Profits: Not So Much.
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) | OPM (%) |
|---|---|---|---|---|
| FY21 | 10,359 | 803 | 9.53 | 13% |
| FY22 | 12,789 | 4,357* | 51.38 | 11% |
| FY23 | 15,078 | 823 | 9.68 | 11% |
| FY24 | 16,770 | 883 | 10.31 | 11% |
| FY25 | 17,238 | 800 | 9.35 | 10% |
*FY22 profit includes one-time windfall from sale of insurance biz (HDFC Life deal) — otherwise flat.
📉 Real 5-year PAT CAGR: ~1%
📈 Sales CAGR: ~4%
🧊 Growth engine = frozen
📉 3. Quarterly Results = ECG of a Tired Heart
| Quarter | Sales (₹ Cr) | Net Profit (₹ Cr) | OPM (%) |
|---|---|---|---|
| Mar ’22 | 3,523 | 3,953* | 9% |
| Mar ’23 | 3,677 | 181 | 10% |
| Mar ’24 | 4,173 | 186 | 11% |
| Mar ’25 | 4,335 | 188 | 10% |
*Includes other income of ₹3,832 Cr from the insurance stake sale. Not recurring. Not reliable.
🫠 Post-deal profits haven’t cracked ₹200 Cr per quarter since.
⚠️ 4. So Many Green Shoots, But No Real Tree
Exide talks big:
- 👷 Gigafactory in Bangalore – joint venture with SVOLT (China)
- 🧪 Lithium-ion cells, modules, and packs in progress
- 🛠️ Capex-heavy investments — ₹3,426 Cr in CWIP as of FY25
- 🌏 Global ambitions, but exports = <10% revenue
But in reality?
🪫 ROE is barely 6%.
🪫 ROCE down to 9%.
🪫 Net profit has shrunk since FY18.
🔍 5. Valuation Check – Is It Even Charging?
| Metric | Value |
|---|---|
| CMP | ₹383 |
| EPS (TTM) | ₹9.35 |
| P/E | 40.9x (🚨 yikes) |
| Book Value | ₹164 |
| P/B | 2.3x |
| Dividend Yield | 0.52% |
| ROE (3Y Avg) | ~6% |
A P/E of 40x for a company with 1% profit CAGR?
That’s not valuation. That’s hallucination. 🧠💥
🔋 6. Why Is Market Still Holding On?
- Brand strength: Legacy of trust – UPS = Exide for Indian consumers
- EV Hype: Hope that lithium biz will finally revive valuation
- Low debt: Borrowings are just ₹2,017 Cr on ₹13,828 Cr reserves
- Large CWIP: Investors assume big projects = future growth
But until lithium turns into actual revenue, this is just premium pricing for nostalgia.
🧮 7. Fair Value Estimation – Even With a Lithium Premium
Let’s give them the benefit of doubt. Assume:
- EPS grows to ₹12 in FY26
- Assign a fair P/E of 20–25x (assuming lithium success kicks in)
| Scenario | EPS | P/E | Fair Value |
|---|---|---|---|
| Base Case | ₹12 | 20x | ₹240 |
| Bull Case | ₹12 | 25x | ₹300 |
🎯 EduInvesting Fair Value = ₹240 – ₹300
CMP = ₹383
🧯 Overvalued by 20–37% — even with optimistic lithium assumptions
🛠️ 8. Key Risks & Red Flags
| 🚩 Issue | Details |
|---|---|
| Profit growth flat | 5Y PAT CAGR ~1% (excluding windfall) |
| ROCE & ROE tanking | Down from 23–24% to 9–10% |
| Capex-heavy | ₹3,426 Cr in CWIP = delayed monetization |
| P/E too high | 40x for a slow-grower |
| Cash flows inconsistent | Negative net cash flow in FY25 |
| FII stake flat | Hovering around 11.6% |
🧠 TL;DR: Legacy Battery, But No Spark Plug ⚡
- Dominates B2C battery biz, but profits have barely moved
- Running on nostalgia, not net income
- EV potential is real, but it’s still charging… slowly
- Expensive valuation with minimal payout or margin buffer
Unless lithium turns them into the Tesla of India (unlikely), this stock may stay rangebound.
✍️ Written by Prashant | 📅 June 18, 2025
Tags: Exide Industries, lithium battery stocks India, EV battery manufacturers, Exide FY25 analysis, Exide fair value, Exide vs Amara Raja, undervalued auto stocks, legacy stocks India, battery sector outlook
