Should You Buy Exide Industries After Its Strong Q1 FY27 Performance?
About This Analysis
Exide Industries delivered a strong start to FY27 with robust revenue growth across most business segments. Morgan Stanley believes improving demand, stable profitability and the company's long-term electric vehicle battery opportunity continue to strengthen the investment case. The brokerage expects the EESL business to become an important value driver over the coming years.
Exide Industries delivered a strong start to FY27 with robust revenue growth across most business segments. Morgan Stanley believes improving demand, stable profitability and the company's long-term electric vehicle battery opportunity continue to strengthen the investment case. The brokerage expects the EESL business to become an important value driver over the coming years.
Morgan Stanley Maintains Overweight Rating
Morgan Stanley has maintained its Overweight (OW) recommendation on Exide Industries with a target price of ₹391.
According to the brokerage:
- Quarterly performance remained stronger than expected.
- Revenue exceeded Morgan Stanley's estimates by approximately 2%.
- Business momentum continues to improve across key operating segments.
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Revenue Growth Remains Strong
Exide Industries reported healthy operational performance during the quarter.
Key highlights include:
- Revenue increased 18% year-on-year.
- Revenue was approximately 2% ahead of Morgan Stanley's expectations.
- Growth benefited from:
- A favourable low base.
- Price increases.
- Strong demand across most business verticals.
Inverter Business Supported By Summer Demand
Morgan Stanley highlighted the company's high-margin inverter business as another positive contributor.
The brokerage believes:
- Strong summer demand supported inverter sales.
- The inverter segment benefited from a relatively low comparison base.
- Higher-margin product sales are likely to support overall profitability.
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EESL Remains The Next Growth Driver
Morgan Stanley values Exide's core battery business at approximately 18x FY28 Price-to-Earnings (P/E).
The brokerage further noted:
- Investments have been valued at current market prices.
- The implied valuation for the EESL business is around 1x Price-to-Book (P/B).
- A successful scale-up of EESL could become the next major catalyst for the stock.
Overall Outlook
Morgan Stanley believes Exide Industries continues to benefit from healthy demand across its core battery businesses while simultaneously building its future electric mobility platform. Continued execution in EESL, combined with steady growth in traditional battery segments, could strengthen earnings and support long-term shareholder value.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Registered Investment Adviser, observes that Exide Industries has delivered a strong quarter with broad-based revenue growth and encouraging performance in higher-margin product segments. While the core battery business continues to generate stable cash flows, the successful expansion of the EESL electric vehicle battery business could become the company's most significant long-term growth driver. Investors should closely monitor the pace of execution, capacity ramp-up and future profitability of the EV battery business.Read Free market insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Disclaimer: This article is intended solely for educational and informational purposes. Brokerage opinions represent the views of the respective research firms and may differ significantly. This article should not be construed as investment advice or a recommendation to buy or sell any security. Investors should conduct their own research or consult a SEBI Registered Investment Adviser before making investment decisions.
Disclaimer: This article is intended solely for educational and informational purposes. Brokerage opinions represent the views of the respective research firms and may differ significantly. This article should not be construed as investment advice or a recommendation to buy or sell any security. Investors should conduct their own research or consult a SEBI Registered Investment Adviser before making investment decisions.
