Budget 2023: Battery stocks climb over 9% on custom duty reduction

Battery stocks surged over 9% on BSE after FM Nirmala Sithraman announced the customs duty reduction from 21% to 13% on Lithium Cells and an extension of the subsidies on EV batteries for one more year.

Shares of Kabra Extrusiontechnik surged over 9% to Rs 603 on BSE. Exide Industries and Amara Raja Batteries also rose up to 6%.

While announcing the Budget 2023, Sitharaman announced that the subsidies on Electric Vehicle batteries will be extended for one more year, making EVs cheaper in India. "I propose to continue the concessional duty on lithium-ion cells for batteries for another year", she said.

Kalyan C Korimerla, MD & Co-Promoter, Etrio Automobiles said: "We applaud the Budget for making Green Growth one of the top 7 priorities. The Pro-EV Budget focuses on much-needed initiatives such as customs duty reduction from 21% to 13% on Lithium Cells and an extension of the subsidies on EV batteries for one more year. These are welcome initiatives as these will help boost the demand."
"The policy on the replacement of old polluting vehicles should accelerate the transition towards EVs, which is in line with the Budget’s aim to spur eco-conscious lifestyles. Overall, we are happy with the budget as it is inclusive, and progressive and will encourage investments in the EV sector," Korimerla added.

As per Trendlyne data, the highest target price for Amara Raja Batteries goes up to Rs 779, while the average target price estimate is Rs 624, an upside potential of 5% from the current market prices. The consensus recommendation from 20 analysts for the stock is a hold.

However, the highest target price for Exide Industries goes up to Rs 265, while the average target price estimate is Rs 203, an upside potential of 12% from the current market prices. The consensus recommendation from 21 analysts for the stock is a buy.

S K Hozefa, CEO, Tradeplus, said: "The removal of customs duty on capital goods and machinery used for the manufacture of lithium-ion cells for electric vehicle (EV) batteries is expected to lower the cost of EVs in the country. This is seen as a positive move that will support the growth of the EV industry, he said.

"The proposed customs duty exemptions on the import of capital goods and machinery required for the manufacturing of lithium-ion batteries bring in a new lease of life for all battery manufacturers as it would help accelerate the country’s production capacity and also gives the much-needed momentum to the country’s vision to become self-sufficient in its EV needs," Pankaj Sharma, Co-Founder &
Director of Log9 Materials said.

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