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Exide Industries Limited — Q2 FY26
Exide Industries reported a modest 1.3% revenue growth in H1 FY26, with Q2 declining 2.1% due to GST rate cut disruptions and destocking.
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Exide Industries reported a modest 1.3% revenue growth in H1 FY26, with Q2 declining 2.1% due to GST rate cut disruptions and destocking. The aftermarket automotive segment grew 10-11%, but solar and inverter businesses saw sharp declines. Management expects a strong rebound in H2, citing 11% retail growth in October for passenger vehicles and pent-up demand. The lithium-ion cell plant is nearing commissioning, with first production expected by end of FY26. Margins are expected to recover to 12-13% in coming quarters, aided by cost excellence initiatives. Key risk: continued input cost inflation and inability to pass through price increases.
एक्साइड इंडस्ट्रीज की पहली छमाही (H1 FY26) में कमाई में सिर्फ 1.3% की बढ़ोतरी हुई। दूसरी तिमाही (Q2) में 2.1% की गिरावट आई, क्योंकि GST दरों में कटौती और डीलरों के पास माल कम करने (डीस्टॉकिंग) का असर पड़ा। ऑटोमोटिव आफ्टरमार्केट सेगमेंट में 10-11% की बढ़त रही, लेकिन सोलर और इनवर्टर बिज़नेस में भारी गिरावट आई। कंपनी को उम्मीद है कि दूसरी छमाही में जोरदार सुधार होगा, क्योंकि अक्टूबर में पैसेंजर वाहनों की खुदरा बिक्री 11% बढ़ी और मांग में तेजी आ रही है। लिथियम-आयन सेल प्लांट जल्द शुरू होने वाला है, पहला उत्पादन वित्त वर्ष 2026 के अंत तक होगा। लागत बचत के उपायों से अगली तिमाहियों में मुनाफा (मार्जिन) 12-13% तक पहुंचने की उम्मीद है। मुख्य जोखिम: कच्चे माल की बढ़ती कीमतें और कीमतें बढ़ाने में मुश्किल।
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Input cost inflation and pricing power
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Aftermarket automotive growth (Q2)
10-11%
+10-11% YoY
Four-wheeler and two-wheeler aftermarket replacement grew double-digit in Q2.
Solar business growth (Q1 vs Q2)
35% to -5%
-40pp QoQ
Solar business swung from 35% growth in Q1 to -5% in Q2 due to GST disruption.
Cash flow generation (H1)
INR 500+ crore
+INR 500 crore vs Mar
Incremental cash flow from efficient working capital management between March and September.
Lithium-ion cell investment (H1)
INR 580 crore
Cumulative INR 3,947 crore
Total equity investment in Exide Energy subsidiary as of H1 FY26.
What Changed vs Last Quarter
NEW
Lithium-ion cell production start by end of FY26
First line (cylindrical NCM for two-wheelers) to be commissioned, with process validation and sample preparation ongoing.
NEW
EBITDA margin corridor of 12-13% in coming quarters
Management expects margins to return to 12-13% range as volume growth resumes, assuming stable lead prices.
NEW
Export business uptick from Q4 FY26
New geographies and portfolios trials completed; exports expected to see positive tick from January onwards.
UPDATED
Solar business to cross INR 1,000 crore this year
Solar franchise expected to scale up to INR 1,000 crore in FY26, with aspiration to reach INR 1,500 crore in 2-3 years.
DROPPED
Lithium-ion cell trial production in calendar 2025
Trial production of lithium-ion cells to start within calendar 2025, with commercial serial production expected after 4-5 months of homologation.
DROPPED
Inverter battery growth recovery in Q1 FY26
Management expects inverter battery demand to pick up in Q1 FY26, with new go-to-market initiatives and RP Home series driving growth.
DROPPED
Punch-grid technology for 100% two-wheeler capacity by November
Remaining 50% of two-wheeler capacity to be converted to punch-grid technology by November 2025, after successful pilot on first 50%.
NEW RISK
Input cost inflation and pricing power
Lead prices remain elevated and forex unfavorable; company has not fully passed on cost increases and may face margin pressure.
NEW RISK
GST disruption impact on demand
GST rate cut caused destocking and deferred purchases; recovery in Q3 is expected but not guaranteed.
NEW RISK
Lithium-ion cell ramp-up and customer adoption
First production is near, but utilization ramp-up and customer homologation timelines remain uncertain.
NEW RISK
EPR compliance costs
New battery waste management regulations led to higher other expenses; ongoing costs may not be fully passable to customers.
RISK GONE
Antimony price volatility
Antimony prices surged from $11,000 to $16,000 per ton in Q4 due to China's export ban, causing a INR 50 crore EBITDA hit. Further increases could pressure margins.
RISK GONE
Lithium-ion cell manufacturing learning curve
Initial cell production will face high rejection rates (10-12%) and yield losses, typical for new gigafactories, potentially impacting profitability in early years.
RISK GONE
Weak demand in telecom and home inverter segments
Telecom demand declined 25-30% due to high base from 5G rollout, and home inverter market remained soft. Recovery is uncertain.
RISK GONE
Competitive pressure from imported cells
Government incentives currently favor cell imports over domestic manufacturing, which could delay the ramp-up of Exide's cell business until policy shifts.
🤫 Topics management stopped discussing
Mentioned in Q2 FY25, Q4 FY25
Trial production of lithium-ion cells to start within calendar 2025, with commercial serial production expected after 4-5 months of homologation.
Fast read
Guidance and risk preview
First line (cylindrical NCM for two-wheelers) to be commissioned, with process validation and sample preparation ongoing.
Lead prices remain elevated and forex unfavorable; company has not fully passed on cost increases and may face margin pressure.
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