My Best Pick 2015

Jigar Shah

Kim Eng Securities' Jigar Shah thinks Exide will will gain the most from a resurgent automotive business

Published 7 years ago on Jan 09, 2015 5 minutes Read
Soumik Kar

It would not be an exaggeration to state that Exide Industries is the country’s largest battery-maker, straddling three key verticals — original equipment (OE) automotive, replacement market and the industrial segment. It rules the OE market with close to 70% share and holds around 40% share in the replacement market. It produced 27 million auto batteries in FY14 and 1,771 mAh of industrial batteries.

All leading automobile manufacturers, domestic and foreign, are its clients. In the industrial segment, Legrand, Emerson, L&T, and ABB are its big clients. In the telecom segment, all leading telecom players use Exide products. The company has managed to stay abreast technologically as well thanks to multiple partners, including East Penn of the US and Shin-Kobe and Furukawa of Japan. 

In FY14 the automotive segment formed 65% of its revenue with the balance coming from the industrial segment. Within the automotive revenue, Exide derives 71% of its business from the replacement market and the rest from the OE equipment supply.

In other words, it does not have to rely on incremental auto sales to drive its business. In the industrial segment, 64% revenue comes from the power-back or inverter/UPS segment, 24% from infrastructure and the rest from other sectors such as solar. For the past five years, Exide’s revenue increased at a CAGR of 12% and its profit before tax rose at a CAGR of 11% for the same period.


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