Exide Pulls Ahead of Amara Raja in Q2 Amid High Stakes Lithium Race

Exide Industries posted a fifty-four percent jump in quarterly operating profit to six hundred six crore rupees for the September quarter, driven by strong market demand and price hikes. Revenue for the firm rose twenty percent to five thousand twenty-6 crore rupees during the period.

Financial Results

In contrast, rival Amara Raja Energy and Mobility saw its operating profit drop five percent to three hundred eighty-six crore rupees due to higher input costs for metal alloys and sulphuric acid, even as its revenue grew thirteen percent to three thousand eight hundred forty-three crore rupees. Exide raised four-wheeler prices by about ten percent and two-wheeler prices by five percent, while Amara Raja managed smaller hikes of two percent in the September quarter following three percent in the June quarter.

New Technology

Both firms are spending heavily to shift from traditional lead-acid batteries to lithium-ion technology to support the electric vehicle market. Exide started commercial production at its lithium iron phosphate plant and its subsidiary commissioned a six gigawatt-hour cell facility in the second quarter. Amara Raja plans to start production at its ten gigawatt-hour battery energy storage solution plant in the fourth quarter and has invested two thousand one hundred crore rupees in its new energy business.

Market Risks

Nomura Global Markets Research notes that Exide can gain from the electric vehicle push if it manages cell production well, though plant yields take time to stabilise. Motilal Oswal Financial Services warns that heavy spending and low-margin lithium-ion manufacturing pose risks to both firms, while Exide also misses out on the production-linked incentive scheme.

Context

Battery makers across the country are investing massive sums to capture market share as the automobile sector transitions toward electric mobility. These heavy capital outlays temporarily pressure corporate earnings and margins while factories ramp up to commercial scale.