Citi has maintained its ‘Buy’ recommendation on Exide Industries but has revised its target price down to Rs 560 from Rs 610. The decision comes amid concerns over sluggishness in Auto OEM volumes, which are expected to impact revenue growth. However, Citi notes that the impact may not be significant.
Exide is also expected to feel some pressure from the moderation in commercial vehicle (CV) and passenger vehicle (PV) volumes. Nevertheless, the company is anticipated to benefit from upcoming replacement demand, particularly as OEM sales from FY22/23 are expected to enter their first battery-replacement cycle by FY25.
Lead prices, a key input for Exide, have seen moderation in recent months, providing some relief to the company’s margins.
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Exide Industries