Exide Industries and Amara Raja Batteries have been experiencing significant gains in their stock prices over the past few days, largely driven by promising developments in the electric vehicle (EV) battery manufacturing sector. These gains, which have seen shares surge by up to 20 percent, are underpinned by a combination of strategic partnerships, positive analyst recommendations, and optimistic growth prospects.
On April 9th, Exide Industries witnessed a notable uptick in its share price, following a 17 percent surge the previous day. This rally was fueled by an announcement of a partnership between the South Korean automotive giants Hyundai Motor Company (HMC) and Kia Corporation with Exide Industries for the localization of electric vehicle batteries in India.
The collaboration underscores Exide’s growing importance in the EV battery market and its ability to secure partnerships with global original equipment manufacturers (OEMs).
JPMorgan, a leading global brokerage firm, has responded positively to this development by assigning an ‘overweight’ rating to Exide’s stock. The brokerage cited the company’s successful partnerships with global OEMs as a key factor in allaying investor concerns and expressed confidence in the potential for further order wins as Exide continues discussions with various OEMs.
Additionally, JPMorgan has revised its valuation of Exide’s EV battery business upwards, reflecting increased confidence following the Hyundai-Kia partnership. The brokerage has also raised its target price for Exide’s stock, indicating a potential upside of 27.3 percent.
Similarly, Amara Raja Batteries has seen its share price surge by approximately 11 percent over the past three days. Analysts at Sharekhan by BNP Paribas have attributed this upward momentum to the company’s strong performance in client acquisitions, product launches, and its extensive distribution network.
Sharekhan anticipates that Amara Raja will continue to outpace the organized lead-acid battery industry, driven by its focus on the aftermarket segment and its investment in lithium-ion battery cell manufacturing, set to commence deliveries in FY26. Sharekhan has set a price target of Rs 1,052 for Amara Raja’s stock, citing healthy traction in the replacement segment and opportunities in the Li-ion cell business.
Moreover, analysts at Motilal Oswal have expressed optimism regarding Amara Raja’s prospects, highlighting the company’s pursuit of new business opportunities in the battery space, solar energy, and motive power. Motilal Oswal believes that Amara Raja’s expansion efforts, coupled with consolidation in existing areas, position it for leadership in the battery market.
However, despite the positive outlook for both Exide Industries and Amara Raja Batteries, there are potential challenges on the horizon. The declining cost of lithium batteries presents a threat to both companies’ auto and industrial battery segments.
With electric two-wheelers and three-wheelers not requiring lead-acid batteries as auxiliary power sources, a significant portion of revenue for lead-acid battery players could be at risk.
The partnership between Exide Industries and Hyundai-Kia signifies a significant milestone in India’s electric vehicle sector. By localizing the production of EV batteries, particularly focusing on lithium-iron-phosphate (LFP) cells, Hyundai and Kia aim to position themselves as pioneers in integrating locally sourced batteries into their upcoming EV models for the Indian market.
This collaboration not only strengthens Exide’s market presence but also underscores its pivotal role in meeting the growing demand for electric vehicle components in India.
