Exide has enough charge to sustain lead

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With the ongoing recovery in automobile sales, gains from the replacement market, technology upgradations and tie-ups, Exide is on a strong path. The company recently also announced a joint venture with Swiss company Leclanche to make lithium ion batteries.

Why is this important

The recent steps taken by the company, places Exide well to tap future opportunities. However, in the medium term, the revenue and profit growth are expected from the conventional lead acid battery segment in which the company dominates with a market share of more than 60%.

Further, the company’s margins are also expected to move up with the technology upgradation and plant automation which will bring down the service cost and improve efficiency.

Stock to be impacted

With the recent steps being undertaken by the company, Exide industries is expected to gain market share from the unorganised sector and its peers. Further, the joint venture for the manufacturing of lithium ion batteries is likely to make it future ready.

Exide Industries  (CMP: Rs 264, M.cap: Rs 22474 crs, 22.7x FY20E PE)

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