The Compound Annual Growth Rate (CAGR) of the “Battery” industry in India is significant with estimates of around USD 7.20 billion in 2024 and is projected to reach USD 15.65 billion by 2029, growing at a Compounded rate of 16.80 percent.
Moreover, India’s “Lithium-ion Battery” market is expected to witness a high CAGR of approximately 35.30 percent in the upcoming years, largely driven by factors like increasing demand for lithium-ion batteries in India’s energy and transportation sectors and green energy solutions.
The growth is also expected to be fueled by the adoption of electric vehicles (EVs), booming demand for consumer electronics, and various government initiatives in the country.
Listed below is one such mid-cap stock associated with the ‘Battery’ industry to buy now for a potential upside of up to 25 percent:
Exide Industries Limited
Exide Industries Limited is engaged in the manufacturing of storage batteries and other allied products in India. The company’s shares closed at levels of Rs 319.15, slipping around 1.20 percent as compared to the previous close of Rs 323. It has a market capitalization of Rs 27,127.75 crores.
Digging into the financials of the company, the company, after being able to consistently increase its operating revenues and after-tax profits, currently faced a dip in the same with the former slipping from Rs 4,372 crores during Q2FY24 to Rs 3,980 crores during Q3FY24 and the latter shifting down from Rs 270 crores to Rs 203 crores.
Coming onto the ratio analysis, the company’s gross margin, due to increased cost pressure, has gone down marginally from 11.43 percent during FY21-22 to 11.36 percent in FY22-23. The debt-to-equity ratio has shown an increase from 0.02 times to 0.03 times during the time horizon mentioned above.
Having a positive outlook, ICICI Direct gave a ‘Buy’ recommendation on the stock of Exide Industries with a target price of Rs 400 indicating an upside of approximately 25 percent as compared to the share prices prevailing in the market.
The rationale behind providing such a recommendation pertains to the company’s commitment towards the EV transition, steady Q3 performance, improvements in margins, and many other factors.
Keeping a purview of two years, the stock has delivered multibagger returns of around 108 percent. It means that if someone had invested Rs 1 Lakh into the company’s stock two years ago, it would have converted to Rs 2.08 Lakhs. In the near term, the company’s stock rose nearly 20 percent in the last six months.
According to the shareholding data available for the December 2023 quarter, the company’s Promoters hold a 45.99 percent stake, and Foreign Institutional Investors (FIIs), marginally increasing their stake during the recent period, currently hold a 12.94 percent stake in the company.
Written by Amit Madnani
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