The shares of the world’s fourth-largest automotive and industrial battery manufacturer gained 5.6 percent to ₹ 398.05 per share after US Investment Bank, JP Morgan, gave a ‘buy’ recommendation with a 25 percent upside
At 12:45 p.m. on Tuesday, on the National Stock Exchange, Exide Industries Ltd. shares were trading at ₹387, showing an increase of 2.61 percent from the previous close.
Exide Industries Ltd is the world’s fourth-largest manufacturer of automotive and industrial lead-acid batteries Exide Industries Ltd. is primarily engaged in the manufacturing of storage batteries and allied products.
Exide Industries Limited supplies batteries for submarines, including high-end submarine batteries. Exide Industries Limited is also involved in the development of indigenous Type-IV class submarine batteries.
The company reported a 12 percent increase in revenue year on year, from ₹3,538 crore in Q3FY23 to ₹3,980 crore in Q3FY24. During the same period, net profit increased by 2.5 percent, from ₹198 crore to ₹203 crore.
Exide Industries Ltd shares have gained 50% in the last six months and 111 % in the last 12 months.
Based on a strong outlook on Exide Industries Ltd., a global research and broking firm, JP Morgan has given an overweight rating on the stock with a target price of ₹ 480, representing a 25 percent increase from Tuesday’s trading price of 384 per share.
The brokerage revised the valuation of EXID’s EV battery business upward, raising it from Rs 25 per share to Rs 173 per share. This adjustment reflects an increase in capacity utilization assumption from 70% to 87.5%, driven by heightened confidence following the Hyundai-Kia tie-up.
In a note, JPMorgan emphasized that Exide Industries’ successful partnership with a prominent global original equipment manufacturer (OEM) alleviates many investor concerns. It also indicated that additional order wins could be imminent as the company remains engaged in discussions with multiple OEMs.
On April 8, 2024, Hyundai Motor Company (HMC) and Kia Corporation, leading automotive companies based in South Korea, entered into a Memorandum of Understanding (MOU) with Exide Energy Solutions Ltd to manufacture electric vehicle batteries in India and supply them for the upcoming EV models of Hyundai Motor.
Exide Industries intends to invest between ₹4,500 to ₹5,000 crore in building a battery capacity of 6 GW, of which ₹1,820 crore has already been invested. This investment reflects a valuation of the lithium business at 1 times its estimated FY 2026 price-to-book ratio (P/B ratio), as per a report by Morgan Stanley.
Written by Omkar Chitnis
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