Motilal Oswal's research report on Exide
EXID's performance was impacted by higher RM cost inflation, but the same was partially offset by operating leverage. We expect a sustained recovery, led by a recovery in OEMs and aftermarket growth, with a shift to the organized from the unorganized segment. The company is setting up a greenfield multi-gigawatt hour Li-ion manufacturing facility, based on its technical agreement with SVOLT, despite failing to secure a PLI incentive. We maintain our EPS estimates, but have reduced our target multiple to 12x from 14x to account for the increasing threat posed by EVs and lack of PLI incentive in its Li-ion cell manufacturing facility, which will put it at a relative disadvantage.
The stock trades at 14x/11.5x FY23E/FY24E standalone EPS. Valuing it ~12x standalone Mar'24E EPS and INR34/share for its stake in HDFCLIFE (at a 40% holding company discount), we maintain our Buy rating with a TP of ~INR190 per share.
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