Exide Batteries Industries is a superior investment option compared to Amara Raja
Exide Batteries: In the fiercely competitive automotive battery sector, two industry giants stand out as leaders, embodying the ever-changing market dynamics. As the demand for electric mobility and energy storage continues to rise, investors must carefully evaluate the manufacturing, distribution, and research and development capabilities of these companies to determine which one is best positioned for future growth.
Market Dominance
Exide currently commands a significant 50% share of the domestic battery market, giving them a clear advantage in terms of brand recognition and distribution. Meanwhile, Amara Raja holds a respectable 35% share, positioning them as a strong competitor in the industry.
Stock Performance
Over the past five years, Exide Industries has significantly outperformed Amara Raja, delivering a remarkable return of 97% compared to Amara Raja’s 38%. Additionally, Exide Industries boasts a larger market capitalization of Rs. 33,001 crore, indicating their well-established presence in the market compared to Amara Raja’s Rs. 19,573 crore.
Financial Strength
Exide, a debt-free company, reported Q2FY25 revenue of Rs. 4,267 crore, marking a 3.9% year-over-year increase, with a PAT of Rs. 298 crore, a 3.8% rise year-over-year. On the other hand, Amara Raja, with minimal debt, saw revenue growth of 9.8% year-over-year to Rs. 3,251 crore but experienced a decline in PAT to Rs. 236 crore, a 1.2% drop year-over-year. Amara Raja has shown stronger revenue growth with a compound annual growth rate (CAGR) of 11% over five years, while Exide’s revenue grew at a slower rate of 3% during the same period. In terms of profit growth, Amara Raja has outperformed Exide with a CAGR of 13% compared to Exide’s 2%.
Exide Industries is making a substantial investment of Rs. 6,000 crore in a cutting-edge lithium-ion cell manufacturing plant located in Bengaluru. This state-of-the-art facility will have a capacity of 12 GWh and is scheduled to commence production by March 2025. By venturing into this new territory, Exide Industries aims to solidify its position in the rapidly expanding electric vehicle (EV) and energy storage markets, particularly within the automotive sector.
To bolster its production capabilities, Exide Industries has formed a strategic partnership with SVOLT Energy Technology. This collaboration will enable the company to enhance its operations and streamline its processes under the umbrella of Exide Energy Solutions Limited. With the demand for lithium-ion batteries projected to skyrocket to 150 GWh by 2030, this move positions Exide Industries as a key player in the evolving landscape of energy storage solutions.
In conclusion, Exide Industries has demonstrated impressive market share and stock performance, although its revenue growth has been somewhat sluggish. On the other hand, Amara Raja Batteries has shown higher revenue and profitability growth, albeit with a recent deceleration. Both companies are heavily investing in future technologies, particularly in the realm of EVs. Investors are advised to carefully evaluate their risk tolerance and investment objectives when considering these industry leaders.
For more market insights, follow our blog.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.