Exide Industries Targeted at Rs 327 by Motilal Oswal

Exide's Fourth Quarter Results Slightly Exceed Estimates

Motilal Oswal's research report on Exide Industries has revealed that the company's fourth quarter (4QFY26) Profit After Tax (PAT) stood at INR3.1 billion, surpassing the research firm's estimate of INR3 billion. This performance was driven by the healthy double-digit growth experienced in most key segments on a year-over-year (YoY) basis.

However, Exide's revenue growth was modest, with a 9.4% increase mainly attributed to weak exports and a continued decline in the telecom segment. Despite this, the outlook for the lead-acid business remains positive, particularly for the auto segment and the industrial business, excluding the telecom sector. Conversely, concerns regarding the long-term returns from the lithium-ion business persist.

Valuation Assessment

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Exide's stock is currently trading at a price-to-earnings (P/E) ratio of approximately 26.1x and 23.3x for the fiscal years 2027 (FY27E) and 2028 (FY28E) earnings per share (EPS), respectively. This valuation appears to be fairly reasonable. Motilal Oswal has reiterates a Neutral rating for the stock, with a SOTP-based target price (TP) of INR327. The research firm values the core lead-acid business at 15x FY28E EPS, in line with Amara Raja Batteries. Additionally, Exide's value is enhanced by INR59 per share for the electric vehicle (EV) business, based on book value, and INR50 per share for its stake in HDFC Life.

The overall outlook for Exide remains cautious, with the research firm emphasizing the need for careful consideration of the company's long-term prospects.