Exide Industries Posts Record Revenue Amid Cost Pressures, Accelerates Lithium Battery Plans

Record Revenue Driven by Strong Demand

Exide Industries announced its best-ever quarterly revenue for the period ending March 31, 2026, with its domestic operations growing 12.5% year-on-year. This strong performance was bolstered by significant gains in the Auto OEM segment, which saw 25% growth, and record sales for its Home UPS business. The company's Solar vertical also crossed the ₹1,000 crore revenue mark for the full fiscal year.

Navigating Material Cost Pressures

Despite the revenue surge, the company faced substantial pressure from rising material costs, resulting in a ₹150 crore negative impact during the quarter. A key driver of this increase was the price of sulfur, which spiked five-fold over the year.

Lithium Battery Expansion Progress

The company's strategic push into lithium-ion technology is progressing, with total investment in its subsidiary, Exide Energy Solutions, now reaching ₹4,802 crore. Exide is set to begin sample deliveries for its cylindrical lithium-ion cells this month, marking a key milestone. Looking ahead, the Board has approved an allocation of ₹1400 crore for fiscal year 2027 to support ongoing lithium-ion capital expenditure and operational needs.

Management's Growth Outlook

Management anticipates continued growth for Exide's core business, forecasting high single-digit to early double-digit expansion in the coming periods. This outlook assumes the effectiveness of price adjustments and continued demand from key sectors.

Strategic Shift to EVs

Exide's results highlight its capacity to increase overall sales even when facing steep increases in raw material prices. The company's significant expansion into lithium-ion battery technology represents a major strategic shift aimed at securing a strong position in the fast-growing electric vehicle market.

Key Risks and Market Shifts

Several factors warrant close monitoring. Volatility in commodity prices, including lead, plastics, and sulfur, driven by geopolitical events and supply chain disruptions, remains a significant challenge. A weakening rupee also counteracts the benefits of softer global lead prices, impacting input costs. Furthermore, the market is shifting, with demand in sectors like Telecom and E-Rickshaws increasingly moving towards lithium-ion, posing a potential challenge to Exide's traditional lead-acid battery base.

Competitive Landscape

Exide's focus on lithium-ion production mirrors strategies from competitors, such as Amara Raja Energy & Mobility Ltd., which is also making substantial investments and forming partnerships to build its capabilities in manufacturing lithium-ion cells and battery packs.

Key Financials from Fiscal Year 2024

For context, Exide Industries reported standalone revenue of ₹11,306 crore in the fiscal year 2024. Its consolidated profit after tax stood at ₹877 crore, with consolidated EBITDA margins at 13.7% during the same period.

What to Track Next

Investors will be watching for progress on sample approvals and initial customer orders for the cylindrical lithium-ion cells. The ongoing impact of commodity price volatility on profit margins in future quarters will also be key. Execution of the ₹1400 crore planned investment for lithium expansion in fiscal year 2027, along with the performance of the Solar vertical, will be crucial indicators. Management's commentary on margin recovery and the success of price increase strategies will also be closely tracked, alongside any future announcements regarding lithium-ion plant capacity and secured customer agreements.