Exide Industries stock rises 5% as JPMorgan hikes target price

Exide Industries Ltd's battery-making shares soared over 5% to ₹498 each during May 27's afternoon trading session, following JP Morgan's upgrade of its price target to ₹520 due to anticipated further growth potential. At approximately 12:15 pm IST, the company's shares were valued at ₹492 on the NSE, representing a 3.7% increase from the previous trading day's closing price. Exide Industries' stock has been on an upward trajectory, escalating by 55% since the commencement of the year.

Exide Industries has been given an 'Overweight' rating, with a new target price suggesting a potential 10% upside from its current market value. This new target price represents an increase from the previous target of ₹480.

Prominent global brokerage firm, JP Morgan, has expressed bullish sentiment towards Exide Industries, a leading Indian manufacturer of storage batteries. The brokerage has increased its price target for the company's stock, indicating a positive outlook for its future performance. Headquartered in Kolkata, Exide Industries is a major player in the Indian market, specializing in the production of lead-acid storage batteries and offering a wide range of power storage solutions.

According to the brokerage, the company is well-positioned to perform strongly in all its business segments. JP Morgan is optimistic about Exide's ability to deliver across all its businesses. The brokerage predicts that profit margins in the lithium-ion cell business will likely reach the mid-teens once full capacity is utilized. The brokerage emphasizes the importance of not overlooking the industrial demand for lead acid batteries.

Hyundai Motor Company (HMC) and Kia Corporation, two leading South Korean automakers, have announced a joint venture with a domestic battery manufacturer to localize electric vehicle battery production in India last month. Following a review of Exide Industries' growth prospects, Morgan Stanley has increased its target price for the company's stock to ₹485, up from ₹373. Notably, Exide shares have already surpassed this revised target price.

The international brokerage believes the battery manufacturing company's stock has the potential for substantial growth in the coming decade. Government incentives for domestically produced electric vehicles (EVs) are expected to aid the company in establishing itself as a prominent player in the localization of battery cells.

"The company's strong automobile and industrial tie-ups, and early mover advantage could also play in Exide Industries' favor," Morgan Stanley said in a note on the company.

Exide Industries' board has proposed a ₹2 dividend per share for its shareholders, based on a face value of ₹1. This dividend is subject to approval at the upcoming Annual General Meeting. The payment of the dividend will be made to eligible shareholders on the record date.

“The Board of Directors, at its meeting held today, has recommended a dividend of ₹2/- per equity share of ₹1/- each fully paid up (i.e. 200%) for the financial year ended 31st March 2024, subject to the approval of the shareholders at the ensuing 77th Annual General Meeting ("AGM") of the Company,” said Exide Industries in a regulatory filing.

The company announced that, subject to shareholder approval, the dividend will be paid within 30 days following the Annual General Meeting (AGM). The payment will be made to shareholders whose names are listed in the Company’s Register of Members or Register of Beneficial Owners, maintained by the depositories National Securities Depository Limited and Central Depository Services (India) Limited, as of the close of business on July 22, 2024.

Exide Industries Ltd (Exide) specializes in manufacturing storage batteries. Their product line encompasses automotive batteries, solar batteries, industrial batteries, and submarine batteries. Additionally, they produce inverter batteries, genset batteries, and home UPS systems. Exide markets its products under the brand names Exide, SF Batteries, and Dynex.

Exide Industries, serving a broad range of sectors including telecom, infrastructure, automotive, power, railways, mining, and more, operates manufacturing facilities across India in Maharashtra, Gujarat, West Bengal, Uttarakhand, Tamil Nadu, and Haryana. The company's reach extends beyond national borders, with its products exported globally to markets in Asia, the Middle East, Europe, Africa, and North America.