1. While automotive segment is in the throes of a cyclical downturn, GST-related consolidation would drive 12–15% growth in replacement segment for organised players.
  2. Electric vehicles (EVs) are unlikely to displace lead acid batteries fully since auxiliary lead acid batteries are required for starter, lighting, and ignition (SLI) applications in EVs. Besides, OEMs are gradually localising production of lithium-ion (Li-ion) batteries, e.g. Exide’s INR410mn investment in its JV with Leclanche in FY19.
  3. Auto companies are launching platforms to add to longevity of lead batteries.
  4. Demand for industrial batteries has slid in telecom, while motive power, UPS and solar applications are revving up. Positive on the battery industry in light of: i) healthy auto replacement sales; ii) soft lead price scenario; and iii) emerging segments within industrials.

Despite huge capex, Exide generated FCF of INR2.7bn. Uncertainty over Amara Raja technical capabilities following termination of its technical assistance agreement with Johnson Control

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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