Prabhudas Lilladher recommended Accumulate rating on Exide Industries with a target price of Rs 209 in its research report dated August 05, 2019.
Prabhudas Lilladher's research report on Exide Industries
We interacted with EXID's management on the side lines of AGM. The management elaborated how EXID would like to play EV landscape (through CV fleet segment, 2W and other industrial applications) and its preparedness (setting up 3 assembly lines of 250mw each for each of above segments) at an investment of INR2b (of which INR1b will get invested by Mar-20). Of the three, its 1st battery pack assembly line is expected to operational by the 3QFY20 while other two will be ready by Mar-20. On the lead acid front, EXID expects while automotive replacement demand would continue to grow 8-10% in FY20-21, OEM demand will be under pressure in-line with current slowdown. However, industrial segment would continue grow at double-digit rate in FY20/21.
Outlook
We maintain 'Accumulate' with a price target of Rs209 (17xMar'21E standalone EPS plus value of insurance business value.
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