Navratri Special from Religare Broking: Why Exide Industries could give nearly 50% return in next 1 year

Navratri is about to end, and we know how important and auspicious the next few days are, signifying festivities across India. Religare Broking will share a fresh stock idea on each day of Navratri for long-term investors.

Day 8:

Exide Industries

Target: Rs 229

LTP: Rs 156

Upside: 46%

Exide Industries is one of the leading battery manufacturers in India catering to automobiles and industrial segments. The company is present in the OEM as well as replacement and export segments.

Exide is the market leader in the organized lead acid battery segment, commanding a lion's market share in the domestic market. In the organized OEM segment, its overall market share of 3/4W is ~60% while 2W it is ~65%.

In the organised replacement market side, its market share in 2Ws is at ~50% while for 4W it is about 58%. Exide has a huge distribution network with a strong brand image in India.

The automobile future will be established in the electric vehicles (EV) space and the battery is the main component in electrical vehicles. The company has also announced a plan to manufacture lithium-ion batteries to cater to electric mobility.

Given that there is a huge growth opportunity and a healthy market share in the two-wheelers segment battery sales could rise substantially.

Religare Broking remains constructive on Exide's long-term growth prospects led by its constant efforts on strengthening its position in India’s battery market.

Further, a healthy relationship with OEMs, a focus on technology up-gradation, and a faster shift towards organised players in the replacement market would drive growth for the company.

Thus, the domestic brokerage firm has a buy rating on the stock with a target price of Rs 229 valuing the core business at 15x FY24E EPS and Rs 35 for its 4.1% stake in HDFC Life Insurance (at 40% holding discount).

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)