Exide Inds.

Exide Industries reported a modest 4% year-on-year sales growth in Q4 FY25, though sequential growth was stronger at 8%. Approximately 75% of the business segments, including mobility aftermarket, solar, and IUPS, achieved double-digit growth. However, the remaining 25% of the business, comprising auto OEMs, telecom, and home inverters, faced weaker demand. Operating profitability was significantly impacted by a negative INR 50 crores due to soaring antimony prices and an additional INR 25 crores write-off for slow-moving assets. Adjusted for these one-time^📎 impacts, the EBITDA margin would have been close to 13%.

The company has invested INR 1,000 crores in the lithium-ion cell manufacturing project in FY25, with an additional INR 300 crores equity infused into its 100% subsidiary, EESL, in April 2025. The total equity investment to date stands at INR 3,602 crores. Commercial production, initially planned for FY25, is now expected to commence in FY26 due to geopolitical and visa-related delays, which have since been resolved. The plant will feature two lines each for cylindrical and prismatic cells, supporting both NMC and LFP chemistries to cater to diverse end-market applications, including 2-wheeler, 3-wheeler, 4-wheeler, and stationary segments. The company aims for a minimum 80% utilization of its 6 GWh capacity over the next couple of years.

Antimony, a critical alloying element in lead-acid batteries, saw its price surge dramatically from $11,000 to $60,000 per ton in Q4 FY25. This unprecedented^🌐 increase resulted in a negative impact of INR 50 crores on the company's Q4 profitability, despite multiple price increases implemented. Management attributed the surge to geopolitical reasons, specifically China's decision to ban antimony exports due to national security concerns. The company has been consistently passing on price increases to the market and expects prices to stabilize, though the impact of past increases is still lagging.

The home inverter business experienced weakness in Q4 FY25, partly due to an early monsoon onset affecting peak season demand. Historically, this segment relied on the automotive sales network. However, under the new organizational structure, the home inverter business is building its own independent network, which started gaining traction from Q2. This strategic shift aims to tap into new white spaces, such as e-commerce and white goods channels, where the company previously had limited presence. The launch of the 'RP Home' series is part of this initiative, with management expressing confidence in strong growth for inverters in Q1 FY26.

The 4-wheeler aftermarket segment, contributing 25-30% of sales, achieved double-digit growth in FY25. Solar business demonstrated robust growth of 25-27% every quarter. The 2-wheeler aftermarket, which faced supply shortages in the first two quarters, recovered strongly, growing 18% in Q4 FY25. Auto exports also saw significant growth of 25-30% in FY25. Conversely, the telecom infrastructure segment experienced a substantial decline of 25-30% due to the winding down of the 5G rollout boom and a shift towards lithium-ion solutions. The IUPS business, however, showed double-digit growth, driven by critical power backup demand.

Exide is undertaking significant manufacturing technology upgrades to enhance cost efficiency and product quality. A substantial portion of 2-wheeler MC battery manufacturing was transitioned to punched grid technology in Q4 FY25, with the remaining 50% expected to be live by November. This upgrade has yielded benefits in material cost, manpower, and significantly improved consistency and quality, leading to reduced internal rejections and warranty costs. Additionally, the company has invested in continuous casting process technology, the first in India, which started running from March and has shown positive impacts on quality and cost, with plans for further investment in subsequent lines by the end of the calendar year.