Exide Industries: Lead-Acid Running Strong

Exide Industries makes lead-acid batteries for automotive OEMs, the replacement market, inverters, solar, UPS, railways, telecom and industrial use. Its subsidiary Chloride Metals supplies around 50% of its lead requirement. Through Exide Energy Solutions Ltd (EESL), it is building lithium-ion cell capacity in Bengaluru. What happened: In Q1FY27, consolidated revenue grew 17.7% year on year to Rs 5,528 crore. Operating profit rose 15.4% to Rs 622 crore; operating margin was 11.2%, down marginally from 11.5%. Net profit grew 27.9% to Rs 351 crore, with net profit margin improving to 6.4% from 5.8%. Net profit grew faster than revenue, reflecting improved bottom-line efficiency. Why it matters: The core business is self-funding the lithium-ion bet. EESL is building a 12 GWh cell plant in two phases of 6 GWh each. In Q1FY27, the cylindrical cell line was under internal validation while the prismatic line was approaching sample production. Initial commercial dispatches from Bengaluru are expected in FY27. Rs 4,902 crore has been invested in EESL so far. What I am watching: The lithium-ion business is approaching its first commercial moment, but the timeline from sample to scale depends on customer qualification, yield improvement and order conversion. EESL’s returns will depend on capacity utilisation. The core lead-acid margins are steady but face slow compression as automotive mix evolves. My stance: Exide offers an unusual combination: a profitable core battery business funding a large lithium-ion bet. Execution risk on the cell business is real, but the balance sheet is not under stress. That is a better position than most EV battery plays. I do not hold a position in Exide Industries at the time of writing. This is not investment advice.