Buy Exide Industries: target of Rs 183: Sharekhan

Sharekhan is bullish on Exide Industries has recommended buy rating on the stock with a target price of Rs 183 in its research report dated May 07, 2022.

Broker Research

May 12, 2022 / 11:58 AM IST

"India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business," JM Financial research report.

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Sharekhan's research report on Exide Industries

In Q4FY2022, Exide EBITDA and adjusted PAT came below street’s expectations by 8.8% and 4.8%, respectively, largely driven by input cost inflation coupled with high fuel and freight costs. Exide is expected to benefit from recovery in automotive demand, improving share of replacement sales, and rising sales of industrial batteries. Exide formed a new subsidiary to set up a multi-gigawatt lithium-ion cell manufacturing plant in technical collaboration with SVOLT Energy Solutions.

Outlook

We have cut our estimates to build margin pressure, but valuations are attractive at P/E multiple of 9.2x and EV/EBITDA multiple of 5.6x its FY2024E estimates.