Neutral Exide; target of Rs 368: Motilal Oswal

Motilal Oswal's research report on Exide

EXID's 2QFY26 PAT of INR2.2b came in well below our estimate of INR3.2b on account of lower-than-expected revenue. Revenue was mainly affected by channel destocking in segments like auto replacement, UPS and solar and weak demand in home UPS due to extended monsoon. Management expects the bulk of this demand to revive in 2H as the channel would look to restock and OEM demand is picking up.

Outlook

Given the weak 2Q performance, we cut our FY26/FY27 EPS estimates by 9%/3%. While the market appears to be upbeat on EXID’s lithium-ion foray, we remain cautious about the long-term returns from the business. Besides, the stock trading at 27.3x/23.5x FY26E/FY27E EPS appears fairly valued. Reiterate Neutral with an SoTP-based TP of INR368.