Storage battery major Exide Industries Ltd on Tuesday expressed its anticipation of regaining its pre-COVID EBITDA margin of 13-14% within the next one to two years, despite the present margin standing at 10.6% due to inconsistent input costs. According to Exide Industries MD and CEO Subir Chakraborty, the company expects a resurgence in demand after the COVID-19 pandemic, with both the automotive and industrial sectors performing well. However, it may take another one to two years to return to pre-COVID margin levels. Chakraborty also provided updates on the progress of the company’s 12GW lithium-ion cell manufacturing plant, located near Bangalore, stating that it is on track. He further reassured that Exide Industries remains unfazed by emerging alternative technologies, emphasizing that all technologies will play a role in the growing storage battery market. The commercial production at the Bangalore plant is scheduled to begin in 2024-25, with an estimated capex of Rs 4,000 crore. Chakraborty highlighted the attractive incentives received from the Karnataka government, ranging between 18 to 20% of the capex, despite the company not qualifying for the PLI scheme. He mentioned that the impact of anti-dumping measures by GCC countries on batteries would be minimal, as exports currently contribute 8% to the company’s total revenue. Additionally, Exide Industries plans to explore new markets in order to increase exports to double digits in the near future. The company has also applied for regulatory approval for the merger of its wholly-owned subsidiary Exide Energy Pvt Ltd (EEPL) with Exide Energy Solutions (EESL), with expectations of completing the merger shortly. EEPL currently operates a 1.5GW fully automated lithium-ion battery packs and modules manufacturing plant in Prantij, Gujarat, while EESL is the promoter of the lithium cell plant. The aim is to consolidate the lithium businesses under a single entity. Chakraborty confirmed that the existing facility will remain operational alongside the new facility. In the first quarter of the current financial year 2023-24, Exide Industries witnessed steady performance with sales growth of 4.2% and EBITDA growth of 11.7%. Chakraborty concluded by stating that the company’s automation and cost optimization initiatives are producing positive outcomes, enabling enhanced profitability levels, and reinforcing their commitment to innovation and cutting-edge technology products.
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