Buy Exide; target of Rs 310: Motilal Oswal

Motilal Oswal's research report on Exide

Exide (EXID) reported a healthy result in 2QFY24, led by gross margin expansion of 290bp QoQ to 31.1% (est. 28.6%) despite a ~4% increase in lead prices. We expect a sequential recovery to continue for its Lead acid battery (LAB) vertical. For its li-ion cell business, homologation has started and its venture into cell manufacturing is likely to start in FY26. We raise our FY24E EPS by 5% to factor in better gross margin, and maintain FY25E EPS.

Outlook

We value EXID at 16x Sep’25E EPS (vs. 14x earlier) to account for developments in its li-ion business, which is likely to start from FY26. We add INR51/sh value for HDFC Life stake. Reiterate BUY with a TP of INR310.

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