Whalesbook
📉 The Financial Deep Dive
Exide Industries presented a mixed financial picture for the third quarter of FY 2025-26, balancing steady top-line growth with underlying shifts in profitability metrics.
The Numbers:
- Consolidated Revenue for Q3 FY26 grew by 4.7% year-on-year to ₹3,812 Cr, up from ₹3,533 Cr in Q3 FY25. For the 9-month period (9M FY26), revenue saw a 2.3% increase YoY to ₹12,032 Cr.
- EBITDA for Q3 FY26 stood at ₹449 Cr, showing stability compared to ₹470 Cr in the prior year's quarter. The EBITDA margin remained steady at 11.7%.
- Profit After Tax (PAT) increased by 5.2% YoY to ₹258 Cr from ₹245 Cr in Q3 FY25. The PAT margin held at 6.4%.
- Profit Before Tax (PBT) grew by 5.6% YoY to ₹343 Cr.
- However, the 9M FY26 performance showed a decline: PAT decreased by 2.5% YoY to ₹1,071 Cr, and EBITDA saw a marginal 1.0% decrease to ₹1,412 Cr.
The Quality:
Exide Industries continues to maintain a debt-free status, funding its ambitious new projects, including the lithium-ion cell and battery manufacturing plant, through internal accruals. This financial discipline is a significant strength.
However, a critical area of concern is the ROCE (Return on Capital Employed) for the core business, which saw a notable decline from 11.8% in March 2025 to 7.4% in December 2025. This indicates a reduced efficiency in generating profits from the capital employed in its established operations.
Working capital management showed improvement, with inventory days reducing to 95 and working capital usage at 16.2%.
The Outlook & Discussion:
Management highlighted several growth drivers for Q4 FY26 and beyond. These include anticipated improvements in the automotive sector driven by potential GST adjustments and rural sentiment, government targets for solar energy adoption (e.g., PM Surya Ghar scheme), and infrastructure development like railway electrification and data centers.
Strategic imperatives focus on revenue acceleration, customer centricity, enhancing operational efficiencies, and leveraging digitization and process automation. The upcoming lithium-ion plant is a key strategic initiative for future growth in the electric vehicle battery market.
🚩 Risks & Outlook:
The primary risk identified is the declining ROCE in the core business, which requires close monitoring to ensure profitability efficiency is maintained. The successful execution and ramp-up of the new lithium-ion battery plant, along with navigating competitive pressures in both traditional and new energy segments, will be crucial.
Investors will be watching for signs of margin recovery in the core business and the effective scaling of new ventures. The company's ability to capitalize on the EV transition and renewable energy boom, while managing operational costs, will define its long-term trajectory. The strengthening of OEM relationships, including 100% Share of Business for key models, is a positive indicator for its traditional automotive battery segment.