Exide Industries

vineet_mittal · January 2, 2022, 6:43am

Exide has officially closed deal related to exide life insurance on 1 jan 2022.

Now, their Lithium battery venture is targeting to be net profitable in FY 23. Currently main cell components are imported from Europe partner.
As part of PLI, they have cash to invest for manufacturing in Cell chemistry, their EU partner is also planning to co-invest for the same.

I think, next 1-2 years will be mean reverting for Exide wrt Amara raja.

Amara raja is following exide textbook now ( planning to invest in Lead recycle plants , investing in LI batteries)
Looking for anti-thesis as well.

Disc: Invested.

maven26 · January 2, 2022, 6:48am

I believe there is some rule to “by what time Exide can liquidate the holding in HDFClife”

vineet_mittal · January 2, 2022, 6:53am

there are two components to deal: ~760cr in cash and remaining as Stake in HDFC life).
So, second component will have a lock-in of ~2-3 yrs.

For PLI, govt has baselined as ~250cr/GW to be eligible . So, Exide can invest for 3GW with CASH components from insurance deal.

ArunKV · January 2, 2022, 12:54pm

I think the lock in period is for 1 year and part of 760Crs cash received will be used for paying tax for closing out this deal and oncourse balance will be used to fund PLI.

Exide makes 15K yearly sales (10K Battery and 5K Crs from Insurance)

Insurance segment has operating margin of around 0-2%, so no major impact on EPS.

Good thing is, if HDFC life(CMP 31.12.2021 - 650) share increases 20% in 2022, Exide will easily generate additional 1,200 Crs from 4.1% holding in HDFC life which Exide can use it for strengthening it Lithium battery portfolio.

HDFC life can strengthen presence in South India and Exide can focus on it’s core business and expand into Lithium without raising debt and diluting equity.

Look’s like a win win for both the parties.

maven26 · January 3, 2022, 7:42am

Any link of the deal which says the lock in period is 1 year?

ArunKV · January 4, 2022, 5:04pm

Refer Point 17

Shivashunmugam_Muthu · February 17, 2022, 6:25am

Anyone know what is the current status of this share issue of HDFC life for Exide shareholders

Karthic · May 5, 2022, 10:11am

Mar 2022 quarterly statement shows 4,693.75 crores mentioned under Exceptional item which is for the sale of insurance business. Does any one have details about how this is going to be spent?

Karan_Khanna · May 7, 2022, 2:04pm

I am still trying to understand the thought process of Exide’s management. The question in my mind is simple. Exide had earlier created a joint venture with Leclanche and named it Exide Leclanche Energy Private Limited. This was done for manufacturing of Lithium Ion batteries. They also kept increasing the share in subsidiary. The CEO of this subsidiary had stated all was well and they would breakeven this year.

Now Exide has agreement with SVOLT for the same purpose of creating lithium ion batteries…

What is exactly going on? Why two joint ventures for same purpose?

kb_snn · May 8, 2022, 5:25am

Exide Leclanche Energy strength is more in Non automotive sectors like power storage , marine transport etc …

SVOLT is strong automotive player + has ability to set up and run mass production centres

Karan_Khanna · May 8, 2022, 12:42pm

Thanks a lot for response Shailesh. I was looking at products -. This is result of collaboration with Leclanche. On the product page they mention two wheeler, three wheeler and other automotive battery packs.

Don’t get me wrong. The reason for bringing out these points is to make sure that we retail investors are not taken for ride and not being sold the EV story

Disclosure : Invested. Trying to make sure hypothesis still holds…

kb_snn · May 8, 2022, 5:49pm

I was purely looking at wins at customers level … For energy storage they have tied up Tata power , but in 2 W they haven’t signed up large orders …

SVOLT has had large consumer level wins in Auto sector in China and Europe

This is my conclusion …

patelsagar29 · June 13, 2022, 8:56am

Hi Karan,
Nexcharge is for production of battery packs and BMS. They don’t produce Li-ion cells. The SVOLT venture is for producing these cells, as was the plan originally. So far they were procuring cells from Germany for use in Nexcharge.
General public doesn’t know the difference between battery packs and battery cells, but we as investors need to know the difference.
Note: Nexcharge has tie up with more than 100 OEMs, but I don’t know who are they and what’s their size.

Karan_Khanna · June 16, 2022, 2:54am

@patelsagar29 thanks for explaining the difference. I somehow missed the part of Cell vs Pack.

Karthic · July 27, 2022, 4:08pm

Karthic · July 29, 2022, 9:26am

praveens · August 1, 2022, 2:08pm

With the CV & PV automobile stocks and axle, bearing, forging, tyre & other auto ancillary stocks on fire, wondering why battery stocks haven’t picked up in operational performance…. Q1 FYe22 is incomparable due to low base effect of 2nd covid 3rd wave…. Q4 FYe22 is poorer compared with Q4 FYe21…

Regular boarders may like to share their insights… thanks

Karthic · September 27, 2022, 11:31am

Exide Industries Limited is pleased to announce the Bhoomi
Poojan ceremony for its 1st lithium-ion cell manufacturing facility on Tuesday, 27th
September’22, at the Hi-Tech Defense & Aerospace park Phase 2, Bengaluru. The event
marked the formal start of construction of one of India’s first multi-gigawatt hour lithium- ion
cell manufacturing facility. This project is to be carried out in two phases, 1st phase to be ready in 27-30 months.

ksaravanan · September 28, 2022, 1:54am

Who would be the target market as most of the EV companies are planning Giga factory with in-house manufacturing and IP?

Surender · November 16, 2022, 4:13pm

Source: Audio Recording Of Q2 FY23 Earnings Call

Rough notes:

Q: Lead-Acid batteries | In the Last 2-3 Yrs, did the organized sector gain market share?
→ Exide gaining share in all the segments

Q Why are margins down?
→ Last 2 Yrs., all raw material prices have monotonically gone up. Price increased but there is a time lag. After raw material prices stabilize, need 6 months to revert to historical margins (14%) .

Q: How much Capex for the Base business (Lead-Acid)?
→ 400~500 Cr. per year

Q: Demand Outlook?
→ Grown well, Robust demand, No Lack of demand

Q: 13% YoY growth in this Q. Breakup - Volume Vs Value??
→ Double-digit in both volume and value

Q: How double-digit growth in both when the business grew only 13%, which includes inflation
→ Not very clear…Repeat Q | Blabbering by Mgmt Plus-minus growth in different segment

Q: Nexcharge any sales in this Q
→ Production just started…Need time to stabilize

Q: Which product launch under Nexcharge
→ Buses | Telecom | 2W → Main objective: Understand Li-Ion tech | full leveraging only after we mfg own cell

Q: 600+ cr. CAPEX in past 6 months, CF statement
→ Primarily, Land and Tech for cell mfg

Q: Base business, Capacity Utiliz.?
→ 85~90%

Q: Sequential QoQ drop of 3%…mentioned gaining market share but competitor (listed) reported growth
→ Repeat your question | Sales composition not identical | Exide sales heavily into UPS segment | Q2 always decline

Q: Why not selected for the PLI scheme??
→ We’re well informed | Responded practically to the bid | Wish luck to those who got it | Good to get but not worried | Aggressive bidding would likely lead to penalties
Personal Opinion → Pretty strange response

Q: Li-Ion cell mfg facility–> Value add options?? EBITDA margin Target
→ Similar to Lead-Acid | 70% value added in this activity and 30% in module pack in EV battery

Overall Impression:

→ Management was responding instead of answering and providing loose responses in multiple instances.