# 1. Financial Performance ## A. Key Figures * **Revenue Growth (Q4):** **9.4%** YoY overall · **12.5%** YoY domestic * **Revenue Growth (FY26):** **4.1%** YoY overall · **~7.5%** YoY domestic * **EBITDA Margin (Q4):** **11.7%** (+50 bps YoY) · **11.7%** (Flat QoQ) * **Gross Margin (Q4):** **30.1%** (-90 bps QoQ) ## B. Revenue & Growth Outlook * **Record Top-line Performance:** Achieved highest-ever quarterly revenue in Q4, signaling a sharp recovery from a weak second quarter. * **Positive Forward Momentum:** Management maintains a constructive outlook for Q1 based on strong performance observed in **April**. ## C. Margins & Profitability * **Cost Headwinds:** Material costs exerted a **Rs. 150 Cr** negative impact during Q4, leading to a sequential contraction in gross margins. * **Operational Efficiency:** EBITDA margins remained resilient due to manufacturing excellence projects, higher capacity utilization, and strict controls on **factory, employee, and warranty costs**. * **Accounting Neutrality:** The valuation decline in HDFC Life shares was routed through Other Comprehensive Income (OCI), resulting in zero impact on the P&L. ## D. Balance Sheet * **Investment Valuation:** A **Rs. 850 Cr** decline in non-current investments was driven exclusively by mark-to-market adjustments of HDFC Life holdings, with no actual divestment of shares. --- # 2. Lead-Acid & Core Business ## A. Key Figures * **Segment Growth:** **16%** Core Business (ex-Telecom) · **>25%** Auto OEM YoY * **Revenue Contribution:** **53%** Automotive / **47%** Non-Automotive · **70:30** Aftermarket-to-OEM Ratio * **Vertical Revenue:** **>₹1,000 Cr** Solar · **~₹2,300 Cr** UPS · **2-3%** Telecom * **Pricing Actions:** **5-6%** Aggregate hikes (Jan-Mar) · **3%** Hike (April 1st) ## B. Operating Segments * **Broad-Based Momentum:** Core operations saw robust double-digit expansion across 2-wheeler, 4-wheeler, solar, and industrial verticals, with Auto OEM reaching record quarterly highs. * **Technology Substitution:** Revenue contraction in Telecom and E-Rickshaw reflects an accelerating market shift toward lithium-ion alternatives. * **Vertical Milestones:** The Solar business achieved a significant scale milestone, returning to double-digit growth, while Home UPS benefited from seasonal tailwinds to post record Q4 volumes. ## C. Demand & Pricing * **Aggressive Price Pass-Through:** Management implemented four consecutive months of price corrections (January–April) to mitigate non-lead commodity inflation, with further hikes possible in **May and June**. * **Margin Protection:** Beyond indexation-linked pricing for OEMs, the company successfully negotiated specific increases to offset non-lead cost pressures, bolstering Q4 performance. * **Aftermarket Outlook:** Sustained high growth in the OEM segment is projected to feed into the higher-margin replacement market within a **two-year** lag period. ## D. Export Performance * **Geopolitical Headwinds:** Export volumes remain suppressed by global tensions, particularly in Western Europe and the US, with uncertainty expected to persist through **H1**. * **Recovery Targets:** Management anticipates a significant rebound in international trade, targeting a return to an **8%** top-line contribution as macro conditions stabilize. ## E. Customer Metrics * **Strategic Pivot:** While lead-acid remains the core, the company is capturing evolving demand in E-Rickshaw and Telecom through its dedicated battery pack business. * **Channel Stability:** Performance has stabilized following a prior-year "washout" period in the distribution network, with replacement demand now growing at a healthy **mid-teens** rate. --- # 3. Lithium-Ion & New Energy ## A. Key Figures * **Project Investment:** **₹600 Cr** Q4 FY26 · **₹1,500 Cr** FY26 Total · **₹4,802 Cr** Cumulative Equity * **Current Li-ion Revenue:** **₹100 Cr – ₹200 Cr** (Module & Pack business) ## B. Manufacturing & Capacity * **Production Roadmap:** Trial runs for cylindrical cells have commenced, with prismatic LFP lines scheduled for production later this year to facilitate the transition to "Made in India" cells. * **Validation Timelines:** Customer sampling for cylindrical cells is slated for **late May/June 2026** (2-3 month validation), while prismatic samples are targeted for **June/July 2026**. [10, 11] * **Efficiency Benchmarks:** Management identifies yield optimization as the primary cost driver, leveraging **SVOLT technology** and specialized training to achieve cost competitiveness against imports. [8, 9] ## C. Product Portfolio * **Revenue Drivers:** Initial cell revenue will be led by LFP Prismatic lines due to lower regulatory hurdles compared to automotive-grade lines. * **Market Segmentation:** Cylindrical capacity is dedicated to the **two-wheeler** segment, while prismatic cells target **three-wheelers, buses, and stationary storage** (BESS/Telecom). [11, 15] * **Speed-to-Market:** Prismatic cells for stationary and trade applications are expected to generate revenue faster by bypassing lengthy automotive homologation processes. ## D. M&A & Partnerships * **Strategic OEM Alignment:** Active engagement is underway across all vehicle segments and stationary sectors to secure offtake agreements for the upcoming capacity. * **Hyundai-Kia Collaboration:** The existing **6 GWh** internal investment is entirely separate from the co-investment and contract with Hyundai; the latter represents incremental capacity with independent commissioning timelines. [16, 18] --- # 4. Supply Chain & Operations ## A. Key Figures * **BOM Composition:** **95%–96%** Lead, acid, and plastic * **Sulfur Price:** **₹15/kg** (Baseline) · **₹58/kg** (March Exit) · **₹74-75/kg** (April Exit) ## B. Input Price Volatility & Mitigation * **Extreme Commodity Headwinds:** Significant cost spikes in sulfuric acid—driven by refinery underutilization—and Q4 plastic price increases due to crude shortages are impacting the cost structure. * **Pricing Power & Pass-Throughs:** Management is negotiating price corrections with major OEMs to offset inflation in acids, plastics, and LPG; contracts typically feature a **one-quarter lead time** for adjustments. * **Market Calibration:** The company is implementing calibrated price hikes in the aftermarket to manage the unprecedented volatility in chemical inputs. * **Stabilization Outlook:** Long-term business case remains strong as prices stabilize and indexation clauses allow for systematic cost pass-throughs, mirroring the established lead-acid model. ## C. Localization & Strategic Positioning * **Import Substitution:** Localized cell manufacturing is positioned as a critical solution for domestic OEMs to reduce reliance on Chinese imports, which currently necessitate **three months of inventory** versus a standard **one-day** model. * **Backward Integration:** Strategy focuses on true "Make in India" depth, including **electrode manufacturing** and domestic sourcing of anodes/cathodes, rather than simple assembly. * **Cost Competitiveness:** Landed price parity with imports is expected through raw material localization, government subsidies, and "Make in India" incentives. * **First-Mover Advantage:** Exide aims to be the first Indian manufacturer to produce cells at significant scale, capitalizing on OEM demand for resilient local supply chains. ## D. Business Model * **Organizational Synergy:** The transition to the **'One-Exide'** operating model in FY25 has enhanced agility and customer focus, yielding performance synergies into the current fiscal year. --- # 5. Risks & External Factors ## A. Key Figures * **Currency Impact:** **10%** Indian Rupee depreciation * Import Cost Escalation: 3% rise in Chinese cell costs now, +6% by Jan, totaling 9% increase * **Policy Threshold:** **20-25 GW** local capacity required for "Make in India" EV policy shift ## B. Commodity & Currency * **Margin Compression:** Input costs are under significant pressure as substantial Rupee depreciation negates the benefits of softer year-on-year Lead Market Exchange (LME) prices. * **Lead Price Volatility:** Import parity pricing in India remains vulnerable to currency fluctuations; recent price reversals in April threaten to offset previous LME reductions. * **Lithium Uncertainty:** Management is withholding margin projections due to unpredictable lithium markets, which have transitioned from overcapacity to a demand-driven boom with **double-digit price increases**. ## C. Geopolitical Tensions * **Supply Chain Disruptions:** The West-Asia conflict is driving alarming volatility in the pricing and availability of critical secondary inputs, including **LPG, sulfuric acid, and plastics**. * **Strategic Mitigation:** Management views government "Atmanirbhar" (self-reliance) initiatives as the primary defense against import disruptions caused by instability in the Gulf. ## D. Regulatory Updates * **Localization Incentives:** PLI schemes and Ministry discussions are focused on cell-manufacturing localization to counter the rising cost of imports driven by currency weakness. * **Chinese Policy Shift:** Global lithium prices are being forced upward by China’s withdrawal of VAT/export benefits and new profitability mandates for their domestic EV manufacturers. * **Import Headwinds:** Changes to the Chinese VAT structure will make imported cells significantly more expensive by early next year, favoring domestic sourcing. ## E. Macro Impact * **Domestic Resilience:** Favorable Indian demand persists, bolstered by a stable macro environment of low inflation and interest rates. * **Fiscal Tailwinds:** The implementation of GST 2.0 Reforms has notably enhanced consumer affordability during the latter half of the fiscal year. --- # 6. Guidance & Outlook ## A. Key Figures * **Core Business Growth:** **12.5%** domestic current quarter · **11% (+/-1%)** medium-term CAGR * **Projected Investment:** **₹5,000 Cr** invested to date · **₹1,400 Cr** FY27 board approval · **₹6,400–6,500 Cr** total projected * **Market Opportunity:** **20 GWh** estimated Indian automotive EV market ## B. Growth Targets * **Top-line Acceleration:** Management expects improved revenue momentum next year, rebounding from a **Q2 washout** caused by GST policy shifts and supported by strong exit rates. * **Core Business Resilience:** Lead-acid segment maintains high single-digit to early double-digit growth potential, despite headwinds in the Telecom sector. * **Lithium-Ion Revenue Mix:** Prismatic lines are expected to contribute to the top line faster than cylindrical lines due to shorter customer validation and homologation cycles. * **Pricing Strategy:** Future price hikes are anticipated to offset rising commodity pressures, specifically for **steel and sulfuric acid**. ## C. Investment Timeline * **Phase-I Funding:** The approved capital outlay for FY27 covers both CAPEX and working capital requirements for the lithium-ion transition. * **Cell Plant Commercialization:** Significant revenue from the cell plant remains a future catalyst; management committed to a material disclosure prior to the official start date. * **Production Ramp-up:** A dedicated **Rs. 1,000 crore** portion of upcoming investment is specifically earmarked for production scaling. ## D. Market Trends * **Rural Recovery:** Broad-based demand revival in rural markets is being driven by improved consumer sentiment and infrastructure tailwinds. * **Strategic Outlook:** Positive stance on lead-acid longevity is balanced by cautious monitoring of inflationary pressures and domestic demand volatility. * **EV Ecosystem Maturity:** The domestic EV market requires scale from 2-3 major players to potentially trigger further government policy interventions.