ICICI Securities' Retail Equity Research has issued a Buy rating on Exide Industries (EXIIND), setting a 12-month target price of Rs 480 — implying roughly 20% upside from the current market price of Rs 400. The brokerage's bullish stance rests on two pillars: a resilient core lead-acid battery franchise that continues to outperform market perception, and a lithium-ion cell manufacturing venture, run through subsidiary Exide Energy Solutions Ltd (EESL), that is now transitioning from heavy capital investment into near-term commercial production. The Q4 FY26 numbers reinforced this optimism, with revenue climbing 9.4% year-on-year and profit after tax surging 23%, even as the company absorbed significant raw-material cost pressure.

The Quarter That Beat Expectations

Exide's standalone topline for the March quarter touched Rs 4,551 crore, a 9.4% year-on-year increase and a sharp 12.9% jump sequentially. EBITDA came in at Rs 530 crore, holding margins steady at 11.7% — flat compared to the preceding quarter but up roughly 43 basis points from a year earlier. Reported profit after tax landed at Rs 312 crore, a 22.7% year-on-year gain, while earnings per share rose to Rs 3.7 from Rs 3.0.

Cost Pressures Met With Pricing Muscle

Management flagged a punishing run of inflation in non-lead inputs — sulphur, sulfuric acid, plastics, LPG and currency-linked costs — that shaved an estimated Rs 150 crore off gross margins during the quarter. Exide's response was an aggressive, multi-round pricing campaign across its aftermarket channels: increases in January, March, late March and April cumulatively totaling 5-6%, layered with a further 3% hike in April. Original equipment manufacturer contracts are also being renegotiated, though such pass-throughs typically lag by about a quarter.

Where the Growth Is Coming From

Roughly 92% of Exide's business expanded around 16% year-on-year in the fourth quarter, the brokerage noted, with softness concentrated almost entirely in exports, telecom and e-rickshaw segments — together representing only about 8% of revenue. Demand stayed firm across automotive original equipment manufacturers, replacement batteries, home inverters, solar applications and industrial infrastructure. Exports, which once made up 8% of revenue, have slipped to roughly 5% amid geopolitical disruption, though ICICI Securities views this softness as cyclical rather than structural, with recovery potential in markets like Western Europe and the United States once tensions ease.

The Lithium-Ion Pivot Gathers Pace

Exide's greenfield lithium-ion cell facility in Bengaluru represents the next chapter of the growth story. Cumulative investment in EESL has reached approximately Rs 4,802 crore, with another Rs 1,400 crore earmarked for FY27 covering both capital expenditure and working capital. The initial 6 gigawatt-hour phase splits evenly between 3 GWh of cylindrical NMC cells, aimed at the two-wheeler market, and 3 GWh of prismatic LFP cells, targeted at four-wheelers, buses, telecom infrastructure and battery energy storage systems. Cylindrical lines have cleared internal validation with customer samples imminent, while prismatic lines are entering trial production — and management expects the prismatic segment to reach revenue generation faster, since industrial and stationary applications require shorter qualification cycles than automotive original equipment manufacturer approvals.

A Notable Caveat: The Hyundai Clarification

One wrinkle in the narrative: management clarified that its memorandum of understanding with Hyundai Motor Company and Kia is a separate co-investment arrangement, distinct from the already-announced 6 GWh capacity build-out and its Rs 4,800 crore capital plan. The Hyundai project will require incremental capacity, executives said, though they declined to disclose timelines or investment figures — a disclosure that tempers some of the earlier optimism around near-term revenue visibility from the automaker partnership.

The Valuation Math

ICICI Securities arrives at its Rs 480 target through a sum-of-the-parts framework:

Financial Trajectory Through FY28

The brokerage projects net sales climbing from Rs 17,269 crore in FY26 to Rs 21,194 crore by FY28, a two-year compound annual growth rate of 10.8%. EBITDA is forecast to expand from Rs 1,943 crore to Rs 2,534 crore over the same span — a steeper 14.2% CAGR — as margins improve from 11.3% to 12.0%. Adjusted net profit is expected to climb from Rs 1,118 crore to Rs 1,534 crore, a 17.1% two-year CAGR, lifting earnings per share to Rs 18.0 by FY28.

The Risks on the Table

ICICI Securities flags two principal risks to its thesis: a delay in commissioning the lithium-ion cell plant and the subsequent ramp-up of production, and the possibility that operating-leverage gains at the base lead-acid business fall short of expectations as commodity inflation persists.

Bottom Line

With the legacy lead-acid business demonstrating durable double-digit growth across most segments and the lithium-ion venture inching toward commercial reality, ICICI Securities frames Exide as a story of steady core profitability layered with embedded optionality on India's energy-storage localization push — translating into a Rs 480 target and a clear Buy recommendation.