Looks like the market has gotten spooked by the sharp fall in EBITDA margins from 16%+ to 12.9% level seen in Q1 FY18. From the end of Sep the stock price seems to be tracking the LME Lead prices in an inverse way, so for the short term it does look like further increase in Lead price will lead to lower levels.
What the market does not appear to be giving much weight to is -
1) Increase in net block by almost 50% over last 2 years, all funded by internal accruals
2) The recent headway that they have made into Hero and Bajaj auto to supply batteries for the OEM segment, their market share in 2W OEM has always been low and has scope to grow
3) Favorable industry structure
4) Even if Li Ion were to take off in a respectable way (which looks like a pipe dream to me as of now), the installed base of the vehicles sold will convert this business into a cash cow
5) Higher Lead prices are passed on with a lag in the OEM segment, that is how their contracts are structured, management has been consistent on this over the years
6) They keep taking price hikes in the replacement segment which is not a price sensitive market
7) The company has seen the 2003-2008 commodity boom and knows how to deal with such situations
What is getting overweighted seems to be the possibility of EBITDA margins continuing to stay below their long term range of 14-16% and the remote possibility that Li Ion will make a serious dent within the next 5 years.
At an operating cash flow of 600 Cr for FY18 and market cap of 12,000 Cr this is starting to look interesting to me finally after a period of 4 years
Disclosure: Invested since 2011, will add further if the current downtrend in price continues