Is Exide Industries Limited (EIL) a good share to buy?

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Exide Industries Limited (EIL) is set to attract investor attention on April 15, 2024, following an endorsement from brokerage firm Morgan Stanley, which has maintained an Overweight rating on the stock. The company recently acquired a 26% equity stake in Clean Max Arcadia Private Limited, a Special Purpose Vehicle (SPV) focused on solar power generation and supply, indicating its foray into renewable energy. Morgan Stanley has also revised the target price for EIL to Rs 485 from Rs 373, citing optimistic growth prospects. The brokerage firm anticipates significant upside potential for EIL’s share price over the next decade, driven by factors such as government support for domestic electric vehicles (EVs), strategic alliances with auto and industrial clients, technological collaborations, and its early mover advantage in the industry. Notably, a recent contract with Hyundai/Kia underscores EIL’s capabilities, potentially leading to a multi-year partnership. In terms of valuation, battery stocks typically trade at 4x-6x price-to-book (P/B) ratio during the scale-up phase, suggesting that EIL’s stock price could nearly double within 12 months, according to Morgan Stanley’s analysis.

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Exide Industries Limited is a constituent of the S&P BSE 500 index and has demonstrated robust performance across various timeframes. In the past week and two weeks, EIL’s shares surged by 23.62% and 30.61%, respectively. Over the last one month and three months, the stock recorded gains of 24.50% and 17.77%, respectively. On a year-to-date (YTD) basis, EIL’s shares have appreciated by 23.61%. Looking back over longer periods, the company has delivered impressive returns, with share price gains of 114.62%, 154.04%, 125.65%, 79.22%, and 222.29% over the past one year, two years, three years, five years, and ten years, respectively.

In terms of dividends, Exide Industries Limited has consistently rewarded its shareholders. In the previous fiscal year, the company declared a dividend payout of 200%, continuing its trend of substantial dividend payments. Similarly, in 2021 and 2022, EIL announced generous dividend distributions of 200% each, reflecting its commitment to shareholder value. In 2020, the company declared a dividend of 250%. Notably, EIL’s dividend history dates back to July 2, 2001, when it announced its first dividend payout of 150%.

Financial Result of Exide Industries Limited : Click Here

Overall, Exide Industries Limited’s positive growth trajectory, strategic acquisitions, favorable valuation, and consistent dividend payouts make it an attractive investment opportunity for investors seeking exposure to the automotive and renewable energy sectors.

For more than seven decades, Exide has been one of India’s most reliable brands, enjoying unrivalled reputation and recall. Our constant emphasis on innovation, extensive geographic footprint, strong relationship with marquee clients and steady technology upgradations with global business partners have made us a distinct frontrunner in the lead-acid storage batteries space for both automotive and industrial applications.

A leader in packaged power technology, EIL today is India’s largest storage battery company with widest range of both conventional flooded as well as latest VRLA batteries. Apart from serving the domestic market the company exports batteries which have captured niches in South East Asian and European markets.

Recognition of our pursuit of quality was achieved when RWTUV of Germany awarded us the ISO 9001. We have also received ISO 14001 Certificate in recognition of our eco-friendly production processes. Our Automotive Division is certified to ISO/TS-16949.

Exide designs, manufactures, markets and sells the widest range of lead acid storage batteries in the world from 2.5Ah to 20,600Ah capacity, to cover the broadest spectrum of applications. Using the latest technological inputs, we manufacture batteries for the automotive, power, telecom, infrastructure projects, computer industries, as well as the railways, mining and defence sectors.

Exide offers complete solution in areas of equipment selection, battery sizing, optimum room layout, installation, operation and maintenance. Exide boasts of a distribution network and service which is continuously monitored and kept contemporary through evolving life cycles and is always ahead of competition.