Exide Industries – a market leader in batteries for auto OEMs and after-market – said on Tuesday at the company’s annual general meeting that after a few consecutive of months of plunging sales in a post-Covid scenario, there were signs of green-shoots in passenger vehicle and two-wheeler segments, where the year-on-year de- growth was much lesser than the previous months.
“The automobile sector was not performing at desired levels for the last two years. A similar situation persisted in the initial months during the post-lockdown period. However, there are some signs of an improvement in demand, particularly low-cost car as well as two wheeler segments. There is some expectation of improved demand for the automobile sector going into the festive season,” said Gautam Chatterjee, managing director and chief executive officer at the meeting in response to shareholders.
"Many OEMs have registered improved sales vis-a-vis the past couple of months, and this brings back a sentiment of resolve to the sector," he added. However, Exide’s dependence on auto OEM was less than 20 per cent and the after-market was not impacted. Exide was a leader in auto OEMs and after-market.
Chatterjee informed that two new companies – MG Motor (with its Hector model) and KIA Motors (with its Seltos) started this year with 100 per cent use of Exide batteries.
After the lockdown was lifted, business volumes of other institutional segments are also gradually picking; factories too are getting back to normalcy. Exide has a strong market share in most of the industrial business divisions except for the telecom sector. The company’s sales to the telecom sector were subdued as the mergers and acquisitions of telcos led to a rationalisation of towers.
Exide said that it was committed to building capabilities and expertise for lithium ion batteries for electric vehicles and storage and the pandemic had not thrown a spanner in the plans. The company added that it expected demand for batteries to pick up in a phased manner.
It has already set up a joint venture company “Exide Leclanche Energy Private Limited” with technical and financial collaboration with Europe’s energy storage solutions provider, Leclanché.
Chatterjee said, the JV was well placed with an assembly line with a capacity of 1.5 GWh to take a leading position in the lithium-ion battery market in India.
“Production lines have been ordered for battery pack assembly for cylindrical, prismatic and pouch cells, with some of them already in operation as we speak today. Many pilot orders have been collected from multiple automotive OEMs, as well as large telecom operators, UPS manufacturers and solar PV companies,” he added.
The Covid-19 pandemic has turned out to be an advantage for Exide as far as lithium ion batteries are concerned. “Many of our OEMs who wereplanning to go to China for the batteries are now coming back to us,” Chatterjee explained.
To supplement domestic business, Exide is also planning to focus on export sales that currently account for 7 per cent. In the medium-term, it is planning to take it to 10 per cent.
Responding to shareholder queries on the life insurance business, Chatterjee said that it had generated profits in the last 8 years and had a comfortable solvency margin. “It is continuously generating potential for value additions to the shareholders in the future,” he said.