Exide zooms 15%, hits new all-time high on heavy volumes; here's why

According to reports, Hyundai and Kia have entered into an agreement with Exide Energy for electric vehicle (EV) battery localisation in India.

Shares of Exide Industries zoomed 15 per cent to Rs 369.95, also its record high on the BSE in Monday’s intra-day trade backed by heavy volumes on reports of Hyundai, Kia partnering with Exide Energy for electric vehicle (EV) battery localisation in India.

The stock surpassed its previous high of Rs 354 touched on February 5, 2024. The average trading volumes at the counter jumped over 10-fold today. A combined 39.37 million equity shares representing 4.6 per cent of total equity of Exide changed hands on the NSE and BSE.

South Korean auto majors Hyundai Motor Company and Kia Corporation on Monday announced a partnership with homegrown battery maker Exide Energy Solutions for electric vehicle battery localisation in India, the PTI reported.

Hyundai Motor Company and group firm Kia Corporation have signed a Memorandum of Understanding (MOU) with Exide Energy Solutions Ltd, a leading Indian battery company, as part of their electric vehicle (EV) expansion plans, Hyundai Motor Group said in a statement. CLICK HERE FOR FULL REPORT

Exide Energy Solutions Limited (EESL), a wholly-owned subsidiary of Exide Industries, is dedicated for manufacturing lithium-ion cells (cylindrical, pouch, prismatic). The company is engaged in the production, assembly and sale of battery modules and packs. It's primary focus lies in the development of cells and energy storage solutions for both mobility and stationary applications.

Exide Energy Private Limited (Nexcharge), the wholly-owned subsidiary of Exide Industries, manufactures lithium-ion based packs and modules. With the brand Nexcharge, the company aims to capitalise on India’s growing EV battery market.

India is on an upward economic growth trajectory, which augurs well for increasing demand for energy and energy storage solutions. The management anticipates better prospects in both automotive and industrial divisions.

India intends to increase EV market penetration by 2030 with an aim to decarbonise the transport sector. Exide is a frontrunner in this emerging sector, with its existing state-of-the-art facility for supplying packs and modules. The upcoming lithium-ion cell manufacturing facility will further give the company a distinct competitive edge, Exide said in its FY23 annual report.

Meanwhile, the overall demand scenario is showing signs of picking up due to positive rural sentiments. Analyst at Geojit Financial Services expects margin to remain resilient at current level and improve to its historical level owing to cost optimization and better realisation from the lithium ion business. The brokerage firm expects the lead-acid business to coexist with EVs and other battery technologies in the future.

The company's cost optimization initiatives are ongoing, and future margins will depend on commodity price volatility. We expect the revenue to grow by 10 per cent YoY in over FY24-26E factoring in raw material stabilization and diversified mix, analyst said in the Q3FY24 result update.