EXIDEIND

Exide Industries navigated a challenging H1 FY26 with modest 1.3% growth, facing headwinds from GST cuts and destocking. However, the company impressively generated over ₹500 crore in incremental cash flow through efficient working capital. Automotive aftermarket demand remained robust at 12%, with H2 OEM demand expected to strengthen due to GST reductions. While solar and inverter businesses saw temporary declines, a Q3 rebound is anticipated. The lithium-ion cell manufacturing project, with ₹3947 crore invested, is nearing completion for a late FY26 start, initially targeting two-wheeler OEMs with comparable margins. Operational improvements are delivering results, with full margin benefits expected soon; management aims for 12-13% EBITDA margins. The solar business is scaling rapidly, targeting ₹1000 crore+ this year and ₹1500 crore in 2-3 years, primarily with lead-acid batteries. Opinion: The report paints a mixed picture. While H1 faced headwinds, Exide's strong cash generation and robust aftermarket performance are encouraging. The significant investment in lithium-ion and scaling solar business point to strong future growth drivers. Investors should watch for smooth Li-ion ramp-up and sustained margin stability as these new ventures materialize. It's a promising long-term outlook.