Citi Research has revised Exide Industries' target price downward to Rs 560 from Rs 610 while maintaining its 'Buy' rating on the stock. The adjustment is driven by sluggish auto (original equipment manufacturer) OEM volumes, which could moderately impact the company's revenue growth.
'Exide cannot remain unscathed from this moderation in commercial and passenger vehicle (CV/PV) volumes,' Citi said in a note, highlighting the current slowdown in the automotive sector.
In the previous session, Exide Industries' shares ended over 2 percent lower at Rs 471, a 16 percent gap from Citi's revised target price of Rs 560. The stock witnessed declines in both July and August, and has dropped by over 4 percent in September so far.
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Despite this short-term weakness, Citi's 'Buy' rating reflects confidence in Exide's long-term prospects, supported by replacement demand and easing lead prices.
Citi said that Exide is positioned to benefit from upcoming replacement demand, as growth in OEM sales from FY22/23 will enter their first battery-replacement cycle by FY25. Additionally, the recent easing of lead prices offers some respite on the cost front.
Exide is primarily engaged in the manufacturing of storage batteries and allied products in India.
In Q1 FY25, Exide reported net profit growth of 15.5 percent year-on-year to Rs 279.6 crore. Revenue for the quarter saw a 6 percent increase to Rs 4,312.8 crore. The company's EBITDA rose by 14.5 percent to Rs 494.4 crore. Margins expanded by 90 basis points to 11.5 percent.
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