Hold Exide Industries; target of Rs202 : Emkay Global Financial

Emkay Global Financial's research report on Exide Industries

Exide’s Q3 revenue increased 7% YoY to Rs34.1bn, below our estimate of Rs36.1bn, owing to lower-than-expected sales in the replacement and overseas segments. EBITDA grew by 7% YoY to Rs4bn, lower than our estimate by 8% due to revenue miss. We reduce our FY23-25E EPS by 2-4%, mainly due to lower revenue assumptions. Despite losing out in the PLI-ACC scheme, EXID plans to set up a lithium-ion cell manufacturing facility, commissioning of which is expected after two years. Any progress on tie-ups with OEMs for battery supplies could provide clarity on Exide’s long-term growth prospects.

Outlook

We retain HOLD, with TP of Rs202/share (Rs205 earlier), based on 11x FY25E EPS and value of HDFC Life stake at Rs57/share.

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Exide Industries - 31 -01-2023 - emkay