Exide's Q1 surprise triggers mixed analyst calls; what should investors do?

Looking ahead, Nomura maintained its 'Neutral' rating on Exide Industries share, though it raised the SOTP-based target price to ₹404 from ₹392.

Exide Industries in focus: Battery maker Exide Industries posted a steady performance in (Q1FY26), with analysts taking note of its margin beat and cost efficiency, even as structural concerns over its lithium-ion venture and input cost pressures kept them cautious.  On the bourses, after the rising up to 1.68 per cent to an intraday high of ₹391.50, the Exide Industries stock price retreated and slipped into negative zone. At 9:45 AM, Exide Industries share price was trading 0.42 per cent lower at ₹383.40. In comparison, BSE Sensex was trading 0.07 per cent lower at 80,655.56 levels.  Meanwhile, Japanese brokerage firm Nomura observed that Exide Industries' revenue for Q1FY26 stood at ₹4,510 crore, marking a 4.6 per cent year-on-year (Y-o-Y) increase, though it was “~3 per cent below our estimate” but “in line with the Bloomberg consensus estimate.” 

 

 

What stood out was the Ebitda margin of 12.2 per cent, which was considerably higher than Nomura’s and consensus estimates of 11.5 per cent, resulting in an Ebitda beat of ~4 per cent/2 per cent.

 

The margin improvement was attributed to operational efficiency. “This was mainly driven by ~110 bps Q-o-Q lower other cost/sales at 12.6 per cent (Nomura: 13.6 per cent), partly offset by ~40 bps Q-o-Q increase in RM/sales at 69.2 per cent,” Nomura said in its note. As a result, Profit After Tax (PAT) came in at ₹320 crore, reflecting a 14.6 per cent Y-o-Y rise, and exceeding both Nomura and consensus estimates by ~4 per cent/~8 per cent, respectively.

 

While the core business showed resilience, Nomura highlighted key areas of strength and weakness. “Auto OEM demand remains subdued,” it noted, but replacement demand grew in double-digits across both 2W and 4W. The solar segment also delivered strong growth, aided by government support, while industrial UPS and infra-related businesses (railways, traction, power) saw solid traction due to rising demand for backup solutions and improved project execution. These gains, however, were partly offset by a decline in telecom and export markets.  Track Stock Market LIVE Updates

 

Nomura also flagged input cost concerns, saying, “Rising commodity cost [remains] a margin headwind.” The company made an additional investment of ₹400 crore between April and July 2025 into its lithium-ion subsidiary EESL, taking the year-to-date (YTD) investment to ₹3,700 crore. Production from this facility is expected to begin by end-FY26E.

 

Looking ahead, Nomura maintained its ‘Neutral’ rating, though it raised the SOTP-based target price to ₹404 from ₹392. “Structural concerns over the Li-ion business remain, given: 1) falling cell prices and 2) higher competition in this segment. Thus, unless import duties are imposed, margins/ROCEs will likely remain subdued,” it cautioned. The stock currently trades at ~14x FY27F core EPS, which Nomura views as fairly valued. It added, “Prefer Uno Minda (Buy) in the sector.”

 

Domestic brokerage Nuvama had similar views, noting that while Q1FY26 revenue rose 5 per cent Y-o-Y to ₹4,510 crore, it was still 3 per cent below expectations. The growth came largely from double-digit gains in the replacement market, industrial UPS, and infrastructure segments (power, railways, and traction). However, segments such as exports, telecom, and auto OEMs underperformed.

 

Analysts at Nuvama maintained a ‘Hold’ rating and raised the target price to ₹380 from ₹370, valuing the lead-acid battery business at 15x Sep-27E EPS, and assigning ₹60/share for the lithium business and HDFC Life investments. “We are building in a core revenue/Ebitda CAGR of a stable 7 per cent/9 per cent over FY25–28E,” Nuvama added.

 

Motilal Oswal, too, highlighted the better-than-expected PAT of ₹320 crore, which came in ahead of its estimate of ₹280 crore, driven by stronger margins despite in-line revenue. However, it remained cautious about the lithium-ion venture. “While the market appears to be upbeat on Exide Industries’ lithium-ion foray, we remain cautious about the returns from the business,” the brokerage stated.

 

Valuation also prompted a neutral stance. “The stock at ~25.5x/23x FY26/27E EPS appears fairly valued,” Motilal Oswal noted, while maintaining a ‘Neutral’ rating with a target price of ₹379, based on 20x Jun’27E EPS.