Analyst Concall
Exide Industries positive on lithium-ion battery segment
This story was originally published at 18:57 IST on 11 November 2024
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--Exide Ind: Demand from vehicular OEMs flat in Jul-Sept
--CONTEXT: Comments by Exide Ind's mgmt in post-earnings analyst concall
--Exide Ind: Demand from telecom sector declined in Jul-Sept
--Exide Ind: Demand from non-vehicular home UPS segment declined Jul-Sept
--Exide Ind: Expect demand from non-vehicular home UPS segment to recover
--Exide Ind: Reorganisation underway, expect top-level hiring going forward
--Exide Ind: Replacement demand for vehicular battery is picking up
--Exide Ind: See UPS battery segment rebound from Jan, Oct-Dec not so strong
--Exide Ind:Seeing lot of traction in volume offtake for lithium-ion battery
--Exide Ind: Expect completion of lithium-ion battery plant in mid-2025
--Exide Ind: To up plant utilisation once lithium-ion battery unit complete
--Exide Ind: Total invest in 1st phase of lithium ion cell plant INR 50 bln
--Exide Ind:Will take bridge loans to fund invest for lithium ion cell plant
--Exide Ind: Hiked prices by 1.5% on an average during Jul-Sept
--Exide Ind: New top level mgmt to improve co's go-to-market strategy
--Exide Ind: Will on-board some top level mgmt personnel in coming 14 days
--Exide Ind: To sell lithium-ion pdts to mobility, energy storage consumers
--Exide Ind: Building lithium-ion battery for both mobility, energy storage
--Exide Ind:Mid-teen margin in lithium-ion cell once capacity fully utilised
By Akshay V. Johnson and Avishek Rakshit
MUMBAI/KOLKATA – Aiming to tap into the solar energy storage segment, Exide Industries Ltd. is developing products which can be used in electric vehicles and for solar energy storage simultaneously, the company's management said in a post-earnings call with analysts Monday. The move comes at a time when the company is strengthening its core portfolio of lead acid batteries, and is also looking at becoming an early domestic mover in the lithium-ion battery segment.
The management said Exide plans to sell products manufactured from its upcoming lithium-ion plant in Karnataka not just to electric vehicles consumers, but also in the energy storage space. Exide Industries is investing INR 50 billion in the first tranche to set up the lithium-ion plant, which is expected to be completed by mid-2025. The company will use bridge loans to fund its investment in the lithium-ion plant. Once the capacity is fully utilised, the company expects to have mid-teen margins in the lithium-ion cell segment.
"There has to be some kind of synergy between automotive batteries and storage batteries because we have to have the benefit of scale also," the management said. "Some of the cells which we have developed will be used both for EV (electric vehicle) pack, as well as for BESS (battery energy storage systems)."
The company will expand its plant utilisation once the lithium-ion plant's construction is complete. The company has started selling lithium battery banks to telecom operators and has a substantial market share in the space, the management said. The company expects a shift in technology from lead to lithium, and is confident it will encash this opportunity through its subsidiary, Exide Energy Solutions Ltd.
The management expects to see better demand in Oct-Mar after the company reported lower-than-expected earnings for the September quarter. Exide reported a net profit of INR 2.98 billion for the September quarter, up 3.8% from INR 2.87 billion a year ago. Analysts had estimated the company's net profit at INR 3.17 billion. The growth in net profit in Jul-Sept was the lowest in six quarters. The company reported a net revenue of INR 42.67 billion for the September quarter, up 3.9% from INR 41.07 billion a year ago. Analysts had estimated the company's net revenue at INR 44.69 billion. The company's revenue growth for the quarter was also the lowest in six quarters. The company hiked prices by 1.5% on average in the September quarter.
For the September quarter, the demand from the telecom sector and home uninterruptible power supply segment declined, the management said. Exide Industries' sales growth for the September quarter was largely driven by the replacement segment, while the demand from original equipment manufacturers didn't see significant growth. The management expects to see significant improvement in its original equipment manufacturer segment in the second half (Oct-Mar) of financial year 2024-25, considering the significant capital expenditure plans of top auto manufacturers in the country.
The management does not expect the uninterruptible power supply segment to see strong growth in the December quarter. It expects a rebound in this segment from January. The replacement demand for vehicular batteries is picking up, the management said.
The company said it was undergoing management reorganisation, and top-level hiring is expected going forward. The company will announce the on-boarding of a few top executives in the coming fortnight, the management said. The new top level management will improve the company's go-to-market strategy, it added.
On Monday, shares of the company closed at INR 436.60 on the National Stock Exchange, marginally down from the previous close. End
Edited by Tanima Banerjee
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