Emkay Global Financial has given Hold recommendation for Exide Industries with a target price of Rs. 175 in its research report issued on May 05, 2022

Emkay Global Financial’s report on Exide Industries

Q4 EBITDA declined 15% yoy to Rs3.5bn and came in below our estimate of Rs4.3bn due to the delay in passing on commodity inflation and the impact of inventory adjustment. Revenue rose 16% to Rs34bn, 2% above our estimate of Rs33.5bn. Management has highlighted positive growth across Auto, Industrial and Export segments. FY22-24E revenue CAGR of 9% should be supported by a pick-up in Auto OEM/industrial segments and stable growth in the auto replacement market. Following the pass-through of commodity price increases and achieving better scale, margins should improve. EXID plans to set up a lithium ion cell manufacturing facility and has been waitlisted under the PLI scheme. Any progress in this regard, such as the announcement of a project plan and forming tie-ups with OEMs for battery supplies, could provide clarity on long-term survival and growth.


We reduce FY23E/24E EPS by 3%/4% to Rs8.3/9.6, factoring in lower margin assumptions, and we introduce FY25E EPS of Rs11. We retain Hold with a TP of Rs175 (Rs185 earlier), based on 13x Jun’24E EPS (Mar’24E EPS earlier) and the value of HDFC Life stake at Rs49/share (Rs58/share earlier).

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