₹4,073 crore. Ebitda margin expanded by 70 basis points to 10.6%, but recovery was slower-than-expected due to elevated raw material prices. In the near term, the management expects the overall demand scenario across segments to be positive.
Easing input cost inflation and ongoing cost-efficiency initiatives should aid profitability. But a more important takeaway is that its lithium-ion cell manufacturing project site enablement work is complete and construction is progressing as per schedule. Further, collaboration with technology partner, SVOLT Energy Technology Co.
Ltd, is underway, including training of research & development personnel. Exide is taking exposure to lithium-ion cell manufacturing driven by the rising penetration of electric vehicles (EV) globally. For this, it is setting up a cell manufacturing facility with a considerable investment of ₹4,000 crore for phase-1.
While the entry into lithium-ion space is a step in the right direction, road to success may not be easy. The company needs to tie up with OEMs for battery supplies for revenue visibility. Exide management said it is in talks with potential customers, but lithium-ion battery production will commence in FY25.
Kotak Institutional Equities analysts say domestic passenger vehicle OEMs have tied up with other companies for procuring EV cells, which will limit addr-essable market size for Exide. With limited opportunity in EV passenger vehicle segment, Exide will have to secure orders in other segments, it said. In the meantime, there is also a worry that large investments in this space can weigh on Exide’s return on equity.
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