Exide Industries Ltd (BOM:500086) Q4 2025 Earnings Call: Navigating Headwinds in a Volatile Market
2min read Exide Industries Ltd, India’s leading battery manufacturer, reported mixed results for Q4 2025, balancing modest sales growth with significant strategic investments and operational challenges. While the company’s financial performance reflected sector-specific headwinds, management emphasized its long-term resilience through technological upgrades, global expansion, and cost mitigation strategies.
Financial Performance: Growth Amid Marginal Pressure
Exide’s Q4 sales rose 4% year-on-year, with an 8% sequential increase, driven by strong contributions from its mobility, solar, and Industrial UPS Systems (IUPS) segments. However, 25% of its business, including auto OEMs, telecom, and home inverters, faced revenue declines.
Operating margins came under pressure due to a sharp rise in antimony prices, costing the company INR 50 crore in Q4. Despite this, EBITDA margins remained stable after price adjustments, and cash flow stayed robust, supported by a debt-free balance sheet.
Strategic Initiatives: Betting on Lithium and Global Expansion
Exide’s most significant move remains its push into lithium-ion cell manufacturing, with INR 1,300 crore invested in FY25 and early 2025. The company now expects commercial production to begin in FY26, though geopolitical delays have caused minor setbacks. Meanwhile, its transition to punch grid technology for two-wheeler batteries and the first export of AGM batteries to Europe signal a strategic shift toward premium, high-margin products.
The company also aims to capitalize on rising demand for EV components, with active discussions with two- and three-wheeler OEMs and a continued partnership with Hyundai.
Navigating Challenges: Temporary Downturns and Structural Shifts
The home inverter segment’s decline, attributed to both internal restructuring and weak demand, is expected to rebound in Q1 FY26. Management cited early monsoon rains as a temporary demand deterrent but noted improving sales trends. Similarly, European industrial battery sales slowed due to economic recession risks, though Exide is expanding its distribution network to counterbalance this.
Antimony prices, a key raw material cost driver, have stabilized, and ongoing negotiations with customers aim to lock in cost recovery mechanisms. Asset write-offs further strained profitability, but Exide’s focus on cost excellence and network expansion in solar and four-wheeler aftermarket segments should mitigate near-term pressures.
Segment-Specific Outlooks: Opportunities in Mobility and Renewables
- Lead Acid Business: The four-wheeler aftermarket and solar segments are growth engines, with solar adoption in rural India creating tailwinds.
- EV Cell Manufacturing: Exide’s lithium-ion investments could position it as a key supplier to India’s rapidly growing two- and three-wheeler EV markets, which are expected to double in size by 2030.
- Global Markets: AGM battery exports to Europe and other regions underscore Exide’s shift toward higher-margin international sales.
Conclusion: A Resilient Foundation for Long-Term Growth
Exide Industries Ltd’s Q4 results highlight both vulnerabilities and opportunities. While margin pressures and delayed lithium production timelines pose near-term challenges, the company’s robust balance sheet (zero debt, strong cash flow), strategic investments in high-growth sectors, and geographic diversification provide a solid foundation for recovery.
With commercial lithium production slated for FY26 and a focus on cost discipline, Exide is well-positioned to capitalize on India’s EV boom and global demand for advanced batteries. Management’s confidence in a Q1 FY26 rebound, supported by improving home inverter sales and stabilization in European markets, suggests the company could deliver mid-term earnings growth.
Investors should monitor two critical factors: the timing of lithium-ion commercialization and Exide’s ability to sustain margin resilience amid volatile raw material costs. If executed successfully, these initiatives could elevate Exide’s valuation to reflect its transition from a traditional battery player to a leader in next-gen energy storage solutions.
In a sector where technological innovation and cost management are paramount, Exide’s Q4 performance underscores its adaptability—a key differentiator in an increasingly competitive landscape.
