Exide Industries Limited

Exide Industries reported a Q3 FY26 revenue exceeding INR4,000 crores, marking a 5% YoY sales growth. While 92% of the business grew by approximately 12% on the top line, overall growth was muted by declines in telecom and exports. Despite commodity price pressures, the company maintained its year-on-year EBITDA margin at 11.7% and achieved a 220 basis points sequential expansion, driven by cost excellence projects and improved product mix. Adjusted pretax profits increased by 12.8% YoY.

Auto OEM sales surged 25% YoY, and the 2W/4W replacement market continued its double-digit growth, contributing to robust automotive performance. Industrial Infra, including Railways and Motive Power, also delivered double-digit growth, with Industrial UPS growing 13%. The solar business, after a negative Q2, returned to single-digit growth in Q3, with 9M growth at 12%. Conversely, the telecom business, now only 1% of total revenue, continued its decline due to a technology shift to lithium-ion, and exports (5-6% of business) faced headwinds from tariff uncertainties and geopolitical tensions.

The company invested INR320 crores in Q3 FY26 and an additional INR50 crores in January 2026 into its lithium-ion cell manufacturing project, bringing the total equity investment in Exide Energy to INR4,252 crores. Product validation for the 2-wheeler cylindrical cell line is ongoing, with samples to be sent to customers soon. The prismatic line (for 3-wheelers/e-rickshaws) is nearing completion, with sample manufacturing expected to start next month, positioning it as the likely first revenue stream from the cell side, with commercial dispatches anticipated around March/April 2026. The first line will have a capacity of 1.5 gigawatt.

Exide faced significant cost pressures from raw materials, with metals like tin, silver, sulfur, and copper reaching near all-time highs, compounded by a 6-7% sequential depreciation of the rupee against the dollar. While antimony prices softened in Q3, other key commodities rose (tin +12%, sulfur +40%, copper +13%). The company implemented a 2% price hike in January 2026, having absorbed costs in Q3 to pass on GST benefits to consumers. Management aims to improve EBITDA margins by 100-150 basis points next year, contingent on LME support and continued cost excellence.

For FY26, Exide's Board approved an equity infusion of INR1,400 crores into Exide Energy for the lithium-ion project, to be utilized based on capital needs for capex and working capital. Additionally, approximately INR500 crores is earmarked for the lead-acid core business, aligning with the strategy to reinvest an amount equivalent to depreciation annually. Capital allocation focuses on manufacturing technology, automation for competitiveness, and strategic investments in the future-ready lithium-ion business, largely funded through internal accruals.

The outlook for the lead-acid business remains positive, driven by strong automotive OEM and aftermarket demand, and rising power backup needs. Exide recently launched AGM batteries for premium passenger vehicles and plans to introduce Ultra and PowerBox inverter batteries, along with Solar Grid-Tie Inverters. The company secured 100% supplier status for the Tata Sierra Petrol and new Kia Seltos models. Exports are expected to see substantial incremental growth next year, buoyed by new partners and potential tariff changes.