Exide Industries shares surged over 3% on 27 November 2024 after the company announced it had increased its stake in its subsidiary, Exide Energy Solutions Ltd (EESL). This move, conducted on a rights basis, is part of Exide's broader strategy to solidify its position in the electric vehicle (EV) battery market.
The company invested ₹100 crore, raising its total stake in EESL to ₹3,052 crore. This infusion of capital is earmarked for scaling operations in advanced battery cell production, a critical component of the EV ecosystem.
Focus on Bengaluru’s greenfield battery plant
The funds will primarily support the development of EESL’s greenfield battery manufacturing plant in Bengaluru. This facility is pivotal to Exide's plans to establish itself as a leader in the EV battery segment.
The push aligns with the growing demand for electric vehicles in India as the nation transitions towards sustainable mobility solutions. Share market investment enthusiasts view this development as a strategic move that could bolster Exide’s long-term growth trajectory.
Exide shares rise amid mixed quarterly results
At 10:40 AM on 27 November, Exide’s shares were trading at ₹339 apiece, marking a 3.2% increase. Despite the positive market reaction to its latest investment, the company reported mixed results for the July-September quarter.
Exide’s standalone profit after tax rose by 3.8% to ₹298 crore, falling short of analysts’ expectations of ₹309 crore, as per LSEG data. Additionally, the revenue for the quarter stood at ₹4,267 crore, missing the ₹4,439 crore estimate.
Automotive sales impact and future prospects
Exide derives nearly 70% of its revenue from automotive clients. However, a slowdown in car sales to dealers during the September quarter impacted its performance. Manufacturers reduced dispatches to manage excess inventory, leading to subdued demand.
Despite these challenges, Exide’s renewed focus on the EV battery sector has positioned the company for future growth. Analysts suggest that share market investment in firms like Exide could offer promising returns as the EV market continues to expand.
Why Exide’s EV focus matters for investors?
Exide’s increased investment in EESL underscores its commitment to future-proofing its business. With EV adoption on the rise, the company’s focus on advanced battery technology could yield significant dividends. Share market investment experts recommend keeping an eye on Exide’s progress in this transformative segment.
Investors looking for opportunities in the share market may find Exide’s strategic shift towards EVs an attractive prospect. While challenges in the automotive sector persist, the company’s robust plans for its EV battery arm signal a promising path ahead.
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