Exide Industries Limited — Q4 FY26 earnings call

Call held 6 May 2026

Management summary

Exide Industries reported a strong Q4 FY26 with overall revenue growing 9.4% YoY to its highest-ever quarterly figure, driven by a 12.5% increase in domestic sales and robust performance in Auto OEM and Solar segments. Despite a Rs. 150 crore negative impact from commodity inflation, the company maintained its EBITDA margin at 11.7% through cost controls and price hikes. Significant investments continue in the lithium-ion cell manufacturing project, with Rs. 4,802 crores invested to date, targeting customer sample deliveries for cylindrical cells this month and prismatic cells by June/July.

Highlights

  • Overall revenue in Q4 FY26 grew 9.4% YoY, achieving the highest-ever quarterly revenue.

  • Domestic business sales grew 12.5% YoY in Q4 FY26.

  • EBITDA margin was maintained at 11.7% sequentially, expanding by nearly 50 bps YoY in Q4 FY26.

  • The solar vertical crossed Rs. 1000 crore revenue for the full year FY26.

  • Auto OEM business recorded its second consecutive quarter of 25% YoY growth.

Concerns

  • Gross margin in Q4 FY26 declined by 90 bps sequentially due to a Rs. 150 crores negative impact from commodity costs.

  • Sulfur prices increased five-fold from Rs. 15/kg to Rs. 74/kg in one year.

  • Exports business declined due to geopolitical tensions and is expected to remain subdued in H1 FY27.

  • Telecom and E-Rickshaw segments are seeing shifts towards lithium-ion technology, impacting traditional demand.

  • Mark-to-market valuation of HDFC Life shares decreased by Rs. 850 crores as of March 31, 2026.

Key financials

2 periods

Headline

  • Overall Revenue Growth
    9.4%
    YoY +9.4%
  • Domestic Business Sales Growth
    12.5%
    YoY +12.5%
  • EBITDA Margin
    11.7%
  • EBITDA Margin Expansion
    50 bps
  • Gross Margin
    30.1%
  • Commodity Cost Impact
    ₹-150 Cr
  • Auto OEM Business Growth
    25%
    YoY +25%
  • Sulfur Price (April exit)
    ₹74
  • HDFC Life Shares Mark-to-Market Decline
    ₹-850 Cr

FY26

  • Overall Revenue Growth
    4.1%
    YoY +4.1%
  • Domestic Business Sales Growth
    7.5%
    YoY +7.5%
  • Solar Vertical Revenue
    ₹1,000 Cr
  • Home UPS Business Sales
    ₹2,300 Cr

What they filed

Q1 FY27: revenue up 17.7%, net profit up 27.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4,450 4,017 4,335 4,695 4,365 −2%4,201 +5%4,735 +9%5,528 +18%
EBITDA472 425 428 538 391 −17%452 +6%488 +14%621 +15%
Net profit233 158 188 275 174 −25%195 +23%217 +15%351 +28%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹600 Cr this quarter · ₹1,400 Cr (FY27) planned
    • Lithium-ion cell manufacturing project (Q4 FY26) ₹600 Cr
    • Lithium-ion cell manufacturing project (FY26 total) ₹1,500 Cr
    • Lithium-ion cell manufacturing project (FY27 plan, mix of CAPEX and OPEX working capital) ₹1,400 Cr
    I will move on to our lithium-ion cell manufacturing project, where we have invested Rs. 600 crores in Q4 and about Rs. 1,500 crores in FY26. With this, the total equity investment made in Exide Energy, our subsidiary till date, stands at Rs. 4,802 crores. (Avik Roy, Page 5) and ...we have already got a Board approval and this has been announced in the past of investing Rs. 1400 crore in the Fiscal Year '27, which is a mix of both CAPEX as well as the OPEX working capital requirement which we have to fund. So, that's the number for FY '27. (Avik Roy, Page 8)

Guidance & targets

Volume

  • Core business growth Volume · medium-term · High confidence high single-digit to early double-digit growth
    I would still believe that the core business at this situation has a potential to do at least a high single-digit to early-double digit growth. (Avik Roy, Page 6) and I think even in the medium-term CAGR, it should be. (Avik Roy, Page 15)

    — Avik Roy

  • Overall top line growth Volume · next year · High confidence improve from this year
    And the overall top line growth also next year should improve from this year, right? (Vinay Singh) Yes. (Avik Roy, Page 5)

    — Avik Roy

  • Core business 5-year CAGR Volume · next five years · Medium confidence similar to 11%
    If you see, the five-year CAGR was 11%. And I don't see any reason for the next five-year CAGR to be different from that, (+/-1%) maybe. (Avik Roy, Page 15)

    — Avik Roy

Capacity

  • Li-ion yield Capacity · High confidence 90%
    The best yield level should be 90%. (Pravin Saraf, Page 8)

    — Pravin Saraf

  • Li-ion plant utilization Capacity · High confidence >85%
    But what we are targeting is that with maximum utilization of the plant more than 85%, yield is 90%... (Pravin Saraf, Page 9)

    — Pravin Saraf

Product Launch

  • Li-ion cylindrical customer sample delivery Product Launch · May 2026 · High confidence around this month (May 2026)
    Our cylindrical lines are expected to start customer sample delivery by around this month onwards... (Avik Roy, Page 5) and So, our internal validations for the cylindrical cells have been completed, and we will be able to give the cell to our customers in this month. (Pravin Saraf, Page 10)

    — Avik Roy

  • Li-ion prismatic product trials Product Launch · shortly after May 2026 · High confidence shortly thereafter
    ...while the prismatic line will be initiating product trials shortly thereafter. (Avik Roy, Page 5)

    — Avik Roy

  • Li-ion prismatic customer samples Product Launch · June/July 2026 · High confidence June/July
    We are targeting by June and July, we can say. We want to give the samples for customer validation. (Pravin Saraf, Page 10)

    — Pravin Saraf

Exports

  • Exports business uncertainties Exports · H1 FY27 · High confidence remain for at least in the first half of this current year
    Geopolitical tensions continue to impact Exports business. We expect these uncertainties to remain for at least in the first half of this current year. (Avik Roy, Page 4)

    — Avik Roy

What to watch in Q1 FY27

Li-ion Cylindrical Cell Customer Validation

next quarter (Q1 FY27)
Current Samples expected to start delivery in May 2026
Target Successful customer validation and initial feedback

Why it matters

Crucial step towards commercialization and revenue generation from the new Li-ion business.

Our cylindrical lines are expected to start customer sample delivery by around this month onwards... (Avik Roy, Page 5) and So, our internal validations for the cylindrical cells have been completed, and we will be able to give the cell to our customers in this month. (Pravin Saraf, Page 10)

Risks & concerns

  • Geopolitical Tensions & Commodity Inflation

    high

    West-Asia conflict, crude shortages, and rupee depreciation are driving up input costs for LPG, sulfuric acid, plastics, and sulfur, leading to a Rs. 150 crore negative impact in Q4 FY26.

    Management acknowledged

  • Li-ion Commodity Price Volatility

    medium

    Lithium prices have shown high volatility, dropping due to overcapacity in China and then rising sharply due to crude shortages and increased EV demand, making prices unpredictable.

    Management acknowledged

  • Dependence on Imported Li-ion Cells/Materials

    medium

    OEMs currently rely on imported batteries from China, creating supply chain risks and volatility, highlighting the need for localized supply chains.

    Management acknowledged

  • Inflationary Economy

    medium

    Management remains cautiously optimistic but will constantly watch the domestic demand situation in view of the expected inflationary economy.

    Management acknowledged

Q&A highlights

7 direct
Breakup of declining business segments (Telecom & Exports) Direct
Yes, Vinay, you are right in the ballpark. (Avik Roy, Page 5) ...3% would also include a bit of E-Rickshaw business. (Avik Roy, Page 5)

Clarifies the specific segments contributing to the 8% business decline and their relative sizes (Exports ~5%, Telecom/E-Rickshaw ~3%).

Asked by Vinay Singh

Li-ion prismatic line revenue start timeline Direct
So, though the production of cylindrical will start first but possibly the revenue stream will come first from the prismatic lines. (Avik Roy, Page 6)

Provides insight into the expected commercialization sequence and revenue generation potential of the different Li-ion cell types.

Asked by Vinay Singh

Commodity cost impact in Q4 and anticipated Q1 FY27 escalation, and price hikes taken Direct
Our impact on material cost for Quarter 4 was roughly net-net impact was Rs. 150 crores, I would say, a negative impact. So, the gross margin, if you see, has come down by about 90 basis points. (Avik Roy, Page 7) ...from January onwards, we could not sustain the cost inflation of material. Therefore, we started taking price increases stage-by-stage. So, 1st January, 1st March, 20th March, I think in three tranches, we have taken increases which maybe amounts to about, let's say, about 5% to 6%... (Avik Roy, Page 7)

Crucial for understanding the pressure on margins, the extent of commodity inflation, and management's proactive pricing actions to mitigate the impact.

Asked by Krupashankar Nj

Lag in passing commodity price increases to OEM contracts Direct
So, the lead time is typically two months to three months? Is that the right metric? (Krupashankar Nj) I will rather say it's a quarter. (Avik Roy, Page 8)

Clarifies the typical delay in adjusting prices for OEM customers, which affects the timing of margin recovery in that segment.

Asked by Krupashankar Nj

Future Li-ion investment, pricing vs imported cells, and yield learning curve Direct
we have already got a Board approval and this has been announced in the past of investing Rs. 1400 crore in the Fiscal Year '27, which is a mix of both CAPEX as well as the OPEX working capital requirement which we have to fund. (Avik Roy, Page 8) ...our target will be meeting the landed cost of the imported cell. (Pravin Saraf, Page 9)

Provides clarity on future investment plans and the strategic goal of achieving cost competitiveness against imports through high utilization and yield targets for the Li-ion business.

Asked by Siddhartha Bera

Timeline for significant revenue recognition from Li-ion cell plant Partial
See, this will be a material disclosure for us. So, be assured that we will let you know much in advance about our start date officially. (Avik Roy, Page 10)

Highlights that while samples are being delivered, significant revenue from the Li-ion cell plant is not imminent and will be disclosed later, managing investor expectations.

Asked by Arvind Sharma

Government support for Make in India cells and PLI incentives Direct
So, if government wants us to really integrate backward in manufacturing our own electrodes, sourcing our own anode and cathode material from within the country, they have to support the industry. (Avik Roy, Page 12)

Emphasizes the critical role of government policy and incentives for the long-term success and localization of the Li-ion manufacturing ecosystem in India.

Asked by Viren Sameer Deshpande

Breakdown of 6 GW Li-ion capacity Direct
So, the 6 gigawatts, we have two chemistries. I think it's a good thing that because of two chemistries, we can be able to cater the various applications. So, we have cylindrical and prismatic. So, our capacity is divided cylindrical in 3 and prismatic in 3 gigawatts. (Pravin Saraf, Page 14)

Provides a clear understanding of the company's Li-ion product strategy and target applications for each cell type.

Asked by Suraj Chheda

3 min read 6 chapters

Detailed narrative

Strong Q4 FY26 Performance Driven by Domestic Growth

Exide Industries achieved its highest-ever quarterly revenue in Q4 FY26, with overall revenue growing 9.4% year-on-year. This strong performance was primarily driven by a robust 12.5% year-on-year growth in the domestic business. Key segments such as 2-wheeler and 4-wheeler OEM, home UPS, and solar all demonstrated double-digit growth, with the Auto OEM business notably recording a 25% YoY increase for the second consecutive quarter. For the full year FY26, the company delivered 4.1% YoY overall revenue growth, with domestic business growing 7.5% YoY.

Margin Resilience Amidst Commodity Headwinds

Despite facing significant commodity cost pressures, resulting in a Rs. 150 crores negative impact in Q4 FY26, Exide Industries managed to maintain its EBITDA margin at 11.7% on a sequential basis, expanding it by nearly 50 basis points year-on-year. The gross margin, however, saw a sequential decline of 90 basis points to 30.1% from 31.6% in Q3. To counteract rising input costs, particularly sulfur which increased five-fold from Rs. 15/kg to Rs. 74/kg in a year, the company implemented multiple price hikes (5-6%) across various businesses from January to April.

Strategic Investments in Lithium-Ion Manufacturing

Exide Industries continued its substantial investment in the lithium-ion cell manufacturing project, committing Rs. 600 crores in Q4 FY26 and a total of Rs. 1,500 crores for the full year FY26. This brings the total equity investment in Exide Energy, its subsidiary, to Rs. 4,802 crores to date. For FY27, the company has approved an additional investment of Rs. 1,400 crores, which will cover both CAPEX and OPEX working capital requirements. The strategic goal is to achieve cost parity with imported cells by targeting over 85% plant utilization and a 90% yield.

Progress Towards Li-ion Commercialization

The company is making steady progress towards commercializing its lithium-ion cell production. Customer sample deliveries for cylindrical lines are expected to commence around May 2026, following internal validations. Product trials for prismatic lines are set to begin shortly thereafter, with customer samples targeted for delivery by June/July. Management anticipates that the revenue stream from prismatic lines will materialize quicker than cylindrical lines due to less extensive validation requirements. The total planned capacity for the Li-ion facility is 6 gigawatts, equally split between cylindrical (3 GW) and prismatic (3 GW) cell chemistries.

Challenges in Exports and Shifting Segments

The Exports business experienced a significant decline in Q4 FY26, primarily attributed to ongoing geopolitical tensions. Management anticipates that these uncertainties will continue to impact export performance at least through the first half of FY27. Furthermore, traditional segments like Telecom and E-Rickshaw are undergoing a structural shift, with demand increasingly moving towards lithium-ion technology, posing a challenge for the legacy lead-acid business in these areas.

Outlook and Government Policy for Localization

The outlook for the lead-acid business remains positive, with expectations of high single-digit to early double-digit growth for the core business in the medium term. However, the company remains cautiously optimistic, closely monitoring the domestic demand situation and potential inflationary pressures. Management emphasized the critical need for government support and a clear policy framework to foster local cell manufacturing, particularly for electrode production, to reduce reliance on volatile imports and build a robust domestic supply chain, especially as the Indian EV market grows.

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