⚡ Why Is Exide Industries Ltd. Stock Not Performing?
1. Legacy Business Drag
- Lead-acid battery business (auto, inverter, industrial) is mature and under margin pressure from rising raw material costs (lead, energy).
- Vehicle electrification is making lead-acid less relevant; ICE vehicle battery replacement demand is plateauing.
2. EV & Lithium Transition Risk
- Exide has invested in lithium-ion cell manufacturing (joint venture with Leclanché, a new Giga factory), but meaningful revenue/profit from this segment is still in the future.
- Market wants proof of success in new tech, not just capex announcements.
3. Intense Competition
- Amara Raja, global battery majors, and aggressive Chinese imports keep pricing tight.
- Exide has lost some OEM share to competitors.
4. Investor Sentiment
- Investors are rewarding clear winners in new energy and rapid EV revenue.
- Exide is still seen as a legacy player with slow execution on new opportunities.
5. Execution Uncertainty
- Delays or challenges in scaling up lithium-ion production could further impact the stock.
🧭 SWOT Analysis: Exide Industries Ltd.
| Strengths | Weaknesses |
|---|---|
| – India’s #1 battery brand, dominant distribution & OEM network | – Heavy dependency on lead-acid batteries |
| – Largest installed base across automotive, industrial, inverter, solar | – Late mover in lithium/EV technology vs. global peers |
| – Ongoing investments in lithium-ion, Giga factory (Kolkata) | – Profit margins vulnerable to lead/energy price swings |
| – Strong R&D and partnerships (Leclanché JV, Tata Group) | – Brand perception: “old tech” |
| Opportunities | Threats |
|---|---|
| – EV adoption boom (2W, 3W, 4W, buses, grid storage) in India | – Fast-growing competition (Amara Raja, global/Chinese imports) |
| – Large stationary energy storage market (solar, telecom, grid) | – Tech obsolescence: lead-acid phase-out |
| – “Make in India” policy/PLI schemes for lithium manufacturing | – Execution risk in new factories/JVs |
| – Exide’s brand can extend to new energy segments | – Policy shifts, regulatory hurdles, price volatility |
🔎 Key Facts Behind the Stock Underperformance
- Revenue growth is moderate; profitability is volatile due to commodity cycles.
- New energy business (lithium, EV batteries) is not yet a large part of the bottom line.
- Market sees Exide as “in transition”—not yet proven as a next-gen energy winner.
- Global peers and local disruptors are faster in some segments, raising competitive risks.
🚦 Summary
- Exide is a market leader in traditional batteries but must prove its capabilities in lithium/EV tech to regain investor confidence.
- Stock will likely remain range-bound until new energy revenues become meaningful and execution risks subside.
- Transition period = investor uncertainty.
Exide Industries’ stock has been severely underperforming, with a -33.7% decline over the past year and trading at ₹380.20 compared to its 52-week high of ₹620. Despite being India’s leading battery manufacturer with an 18% market share in lead-acid batteries, several fundamental issues are weighing down investor sentiment.
Current Performance Challenges
The stock’s poor performance stems from deteriorating financial metrics. Net profit declined 9.3% to ₹7.95 billion in FY 2025, while EPS dropped from ₹10.31 to ₹9.35. Profit margins compressed from 5.2% to 4.6% due to higher expenses, particularly raw material costs. The company is currently overvalued by 51% based on intrinsic value estimates, with a fair value of ₹251.62 versus the current price of ₹380.20.
SWOT Analysis
Strengths
Market Leadership and Brand Recognition: Exide maintains a dominant position with 18% market share in India’s lead-acid battery segment. The company’s “India runs on Exide” tagline reflects strong brand recognition built over decades of operations.
Strong Distribution Network: The company operates through an extensive network of over 15,000 retail outlets across India, providing excellent market penetration and customer reach.
Financial Stability: Exide maintains a low debt profile and has been generating positive cash flow from operations, with improving CFO trends over the last two years. The company maintains a dividend payout of 18.1% and has promoter holding of 45.99%.
Diversified Product Portfolio: Beyond automotive batteries, Exide serves industrial applications and has been expanding into energy storage solutions, positioning itself for the renewable energy transition.
Weaknesses
Technology Dependence on Lead-Acid: Exide’s heavy reliance on lead-acid battery technology presents a significant weakness, with lead-acid accounting for roughly 60% of market share in 2024. This technology faces growing competition from lithium-ion batteries and environmental concerns.
Margin Pressure: The company faces persistent margin compression due to raw material price volatility. Lead prices experienced 20% year-on-year increase in Q2 FY2024, directly impacting profitability. Cost of sales represents 67% of total revenue, indicating high cost structure.
High Capital Expenditure Requirements: Exide faces significant capital expenditure needs, with $150 million invested in 2024 for new manufacturing facilities, particularly for lithium-ion cells. These investments expose the company to execution risks and cost overruns.
Declining Profitability Metrics: The company shows low ROE performance and declining profit margins, indicating inefficient capital utilization compared to industry peers.
Opportunities
Electric Vehicle Revolution: The global shift toward EVs presents massive opportunities for battery manufacturers. The EV battery market is projected to grow exponentially, offering Exide potential for significant revenue expansion.
Energy Storage Market Growth: With India targeting 500 GW renewable energy capacity by 2030, the energy storage market presents substantial opportunities. Government PLI schemes worth ₹19,500 crore for battery storage provide additional support.
Lithium-ion Battery Manufacturing: Exide’s planned investments in lithium-ion technology could position it advantageously in the growing EV and energy storage markets.
Export Market Expansion: The company has opportunities to expand its international presence beyond the current 50+ countries it serves.
Threats
Intense Market Competition: Exide faces fierce competition from established players like Amara Raja Batteries (13% market share) and emerging Chinese manufacturers entering the Indian market. The competitive landscape puts pressure on margins and market position.
Regulatory Challenges: Stricter environmental regulations regarding lead usage and battery recycling pose significant risks. Compliance costs increased by 15% in FY 2023, impacting profitability.
Technology Disruption: The rapid shift from lead-acid to lithium-ion batteries threatens Exide’s core business. The company risks obsolescence if it fails to successfully transition to newer technologies.
Raw Material Price Volatility: Dependence on lead and other raw materials exposes Exide to significant cost fluctuations. Supply chain disruptions increased operating costs by 5% in 2023.
Why the Stock is Underperforming
The primary reasons for poor stock performance include:
- Declining Profitability: Net profit down 9.3% with margin compression from 5.2% to 4.6%
- Overvaluation: Trading at 51% premium to intrinsic value
- Technology Transition Uncertainty: Heavy investments in new technologies without immediate returns
- Raw Material Cost Pressure: Lead price volatility directly impacting margins
- Competitive Pressure: Market share erosion from domestic and international competitors
- Regulatory Headwinds: Increasing compliance costs and environmental restrictions
The stock appears caught in a transition phase where traditional lead-acid battery demand is declining while new technology investments haven’t yet generated substantial returns. Until Exide successfully navigates this technological shift and demonstrates improved profitability metrics, the stock is likely to remain under pressure despite its strong market position.