Exide Industries improved its EBITDA margin to 12.4% in the first quarter of fiscal 2027, driven by price hikes and cost controls. While the core battery business showed gains, the company continues to face profitability challenges in its early-stage lithium-ion segment due to import dependencies.
Exide Industries has reported an EBITDA margin of 12.4% for the quarter ending June 2026, marking a 20 basis point improvement compared to the same period last year. This sequential expansion of 70 basis points reflects the company's efforts to manage profitability in a challenging input cost environment. The performance was supported by revenue growth and internal efficiencies in its supply chain.
Pricing and Input Cost Management
To balance the impact of higher raw material costs and currency fluctuations, the company implemented price hikes between 4% and 6% across its product range during the first quarter. Management indicated that future pricing adjustments will be handled through a steady, incremental approach rather than large, sudden changes. Investors should track these pricing moves as the company navigates ongoing cost pressures.
Challenges in Lithium-Ion Production
While the legacy lead-acid battery business remains the core profit driver, the lithium-ion segment is yet to turn profitable. The company highlighted that current margins in this segment are low, largely because of the reliance on imported cells, which currently face a 5% import duty. Building a local supply chain for essential raw materials is a long-term goal, with management projecting a three-to-five-year timeline for full localization.
Looking ahead, the pricing dynamics for lithium-ion cells could change following shifts in China's export tax policies implemented in early 2027. Increased domestic consumption within China may reduce the global availability of low-cost surplus batteries, potentially altering the competitive landscape for Indian manufacturers. Additionally, the company is managing its supply chain by sourcing samples from China and seeking alternative local partners for materials like electrolytes. The need for new regulatory approvals starting in November 2026 may also require the company to maintain higher inventory levels to avoid production disruptions.
For investors, the key monitorables include the pace of yield improvements in the new lithium-ion facilities, the ability to pass on cost increases to customers, and the progress in localizing the raw material supply chain. The actual impact of China's shifting export policies on cell prices and availability remains a significant factor to watch in the coming quarters.