Shares of Exide Industries and Amara Raja Batteries have soared in the past three sessions, with gains of up to 20%. This surge is attributed to optimistic market sentiment driven by various factors including partnerships, bullish brokerage recommendations, and promising growth prospects within the battery sector.
Exide Industries witnessed a 2% increase in its share price on April 9, following a remarkable 17% rally the day before. This uptick came after South Korean automotive giants Hyundai Motor Company (HMC) and Kia Corporation announced a collaboration with Exide for the localization of electric vehicle batteries in India.
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JPMorgan has upgraded its rating on Exide Industries to ‘overweight’, highlighting the company’s success in securing partnerships with global original equipment manufacturers (OEMs) as a key factor in allaying investor concerns. The brokerage has also revised the valuation of Exide’s EV battery business and raised the target price to Rs 480 from Rs 330, suggesting a potential upside of 27.3% from the April 9 closing price of Rs 377.
Over the past three days, Amara Raja Batteries has experienced a notable uptrend with its stock price surging by approximately 11%. Analysts at Sharekhan by BNP Paribas are optimistic about Amara Raja’s prospects, foreseeing continued outperformance in the organized lead-acid battery industry. They attribute this optimism to factors such as client acquisitions, product launches, and the company’s expansive distribution network.
Sharekhan also highlights Amara Raja’s strong long-term revenue visibility, driven by its emphasis on the aftermarket segment and its forthcoming foray into Li-ion battery cell manufacturing, expected to commence deliveries in FY26. With these factors in mind, Sharekhan has set a price target of Rs 1,052 for Amara Raja, banking on robust traction in the replacement segment and favorable raw material cost trends.
Echoing this sentiment, analysts at Motilal Oswal commend Amara Raja’s strategic initiatives in various battery segments, including solar and motive power, alongside efforts in capacity expansion and network consolidation.
However, there are looming concerns regarding the declining cost of lithium batteries, which could pose a threat to the auto and industrial battery businesses. Additionally, the rise of electric two-wheelers and three-wheelers, which do not necessitate lead-acid batteries, may impact a substantial portion of revenue for lead-acid battery manufacturers.
As of 2:20 pm, Exide Industries shares saw a 2% uptick, trading at Rs 385, while Amara Raja’s stock recorded a 3% increase, reaching Rs 895, slightly below its day and 52-week high of Rs 920.
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