Battery makers expect robust results as auto industry rebounds

Demand from the replacement market for automotive batteries is picking up pretty well and buoyant sales has brought in cheers for Amara Raja and Exide Industries – two key players in India.

According to recently-released financial data on the global auto industry, the impact of Covid pandemic and other geopolitical situations such as the ongoing Russia-Ukraine conflict are cited as key influences. Industry observers suggest that although profit margins continue to remain under strain on account of commodity prices and economic slowdown in general, it is just a matter of time before the effects of raw material prices begin to get reflected in the balance sheets of battery makers like Amara Raja or Exide. 

On the positive side, Amara Raja has seen its revenues jump by close to 39 percent during Q1FY23 on a year-on-year basis, helped by the low base of last year.  Sequentially, on a month-on-month basis growth went up by 20 percent, as the automotive sector including new and aftermarket business in general picked up positively.

Likewise, revenue growth for Exide Industries during Q1FY23 stood at 14 percent  quarter-on-quarter basis and 57 percent year-on-year to Rs 3,899 crore as against Rs 2,486 crore in Q1FY22 respectively. With all the verticals including automotive, industrial and others remaining buoyant both companies have shown positive results.

As part of its new energy portfolio, Amara Raja in August last year shared a vision of its ambitious $1 billion investment programme that will see it scale up its pack capabilities, cell manufacturing, electric charging and energy storage products.

Exide Industries, on the other hand recently announced that it has bought an 80 acre land in Karnataka for the project, wherein the plan is to set up a multi-gigawatt cell manufacturing facility for e-mobility and other business applications.