Exide Industries Q2 FY27 Earnings Call: 6 GWh Lithium Cell Plant Commissioned, Guides 12-12.5% Margin (EXIDEIND)

Exide Industries Ltd held its Q2 FY27 earnings call on November 04, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record H1, Margin Expansion on a Low Base

• Q2 FY 2026-2027 standalone revenue of Rs.5,026 crore (+20.3% YoY) — H1 FY 2026-2027 revenue reached Rs.10,331 crore (+18.9% YoY), the first-ever half year crossing the Rs.10,000 crore milestone.
• Q2 EBITDA of Rs.606 crore (+53.6% YoY) — margin improved to 12.1% from 9.4% in Q2 FY 2025-2026; the ~270 bps expansion was flattered by a low base after the pre-GST 2.0 demand slowdown and production ramp-down in Q2 FY 2025-2026.
• H1 FY 2026-2027 EBITDA margin at 12.2% (+130 bps YoY) — H1 pre-tax profit up 46.5% YoY.
• Demand held up on GST rationalization — affordability gains, a healthy replacement market, and festive buying that gathered pace post-quarter-end.
• Vahan registrations rose sharply — two-wheelers +1.3 million YoY (+32%) and passenger vehicles +0.3 million YoY (+27%), partly on a soft Q2 FY 2025-2026 base.
• Balance sheet remains debt-free — with healthy operating cash flows.
• Input costs elevated vs FY 2025-2026 — prolonged West Asia geopolitical challenges, a weaker rupee and higher crude prices; full sequential benefit of softer LME lead/antimony prices could not be realized due to continuous rupee depreciation.

Broad-Based Growth; Government Tenders Muted

• Automotive OEM up over 25% YoY — fourth consecutive quarter above 25%, with high share gains in new OEM launches (MG Hector, Tomahawk, Tata Eris).
• 2W/4W replacement delivered a fourth consecutive quarter of double-digit growth — home inverters +20% YoY; solar +40%+ on seasonal demand plus government initiatives including PM Surya Ghar Yojana.
• Exports up over 20% YoY — second consecutive quarter, on a low base after exports declined deeply in FY 2025-2026 due to global issues.
• Industrial infrastructure (excluding tech, telecom) grew high single digit — supported by industrial UPS and traction motive power; government tenders, mainly railways and power sector, remained muted.
• European expansion via Excom Energy Solutions GmbH — in September 2026 (Q2 FY 2026-2027), Exide signed a long-term strategic cooperation agreement to expand its industrial battery and energy storage business across the European economic area.
• Electric two-wheelers reached 11.6% of two-wheeler retail in September 2026 — management expects this OEM demand to translate into aftermarket demand in FY 2028-2029 to FY 2029-2030 and is preparing for it.

6 GWh Commissioned; Revenue Ramp Begins with LFP

• 6 GWh lithium-ion cell plant commissioned in Bangalore on 23 September 2026 — EESL's near-term focus is stabilizing lines, lifting yields and ramping revenue; output currently capped at 6 GWh, which management aims to maximize via yield improvement.
• LFP revenue began from October 2026 (Q3 FY 2026-2027) — explicitly not in Q2; NMC, with a longer validation cycle, comes next. Small NMC offtake from a few firm-order customers could start from November 2026, with major OEM offtake hoped at the start of Q4 FY 2026-2027 or February 2027, and surely within FY 2026-2027.
• NMC validation progress — performance testing at leading two-wheeler OEMs complete with positive feedback; life-cycle testing underway, to be followed by pack- and vehicle-level testing; 2W-OEM and telecom-tower validations expected to close concurrently very soon (no specific quarter guided).
• 102 Ah LFP cells already in production — supplied to telecom operators for validation and deployed in Exide's own e-rickshaw packs with positive performance response.
• Cumulative equity investment in EESL at Rs.5,352 crore — including Rs.550 crore invested in FY 2026-2027; Phase 1 (6 GWh) capex requirement is complete as of Q2 FY 2026-2027, but equity funding continues for the next couple of years for working capital and organization build.
• Cost gap vs Chinese imports of 5-10% on a landed basis — varying by form factor and chemistry as of Q2 FY 2026-2027; management noted strategic benefits of a local/second source can sometimes offset this gap.
• Hyundai–Kia co-investment discussions re-accelerated — with Praveen Saraf leading and Hyundai India management collaborating; Hyundai India leadership described as "extremely bullish," aligned with Hyundai's stated full focus on localization in India for EVs. No timeline disclosed; joint statement only upon reaching a milestone.

Inventory Buffer Held; Localization a Multi-Year Path

• 3 months of inventory cover for critical cell materials — held by Exide Energy Solutions to support the FY 2026-2027 ramp-up as restrictions make import approvals slow; exception: electrolyte cannot be held for 3 months and is managed via shorter-cycle ordering.
• No restriction announcements received as of the call — imports from global sources continue; any Chinese export-license control (previously flagged as possible from November 2026) would apply to vendors/suppliers, not Exide directly, but could lengthen delivery lead times, to be mitigated with higher inventory and long-term purchase agreements.
• 100% of cell raw materials currently sourced from S-Volt's approved vendors — Exide has not developed its own low-cost vendors; switching to Indian suppliers requires fresh OEM validation, seen as maybe 2-3 years from now (≈ FY 2028-2029 to FY 2029-2030), preconditioned on local suppliers' performance.
• Localization target of 50-60% of the bill of materials in India in 2-3 years — i.e., by FY 2028-2029 to FY 2029-2030, prioritized by technical criticality, cost contribution and component shelf life; 20+ local suppliers are being worked with, some already at the performance-check stage.
• Management looking forward to government support for local supplier cost competitiveness — noting there is already discussion underway about the PLI scheme.
• Lithium cell pricing is indexed to underlying commodity — with the reference price currently the landed price from China, per Praveen Saraf, MD & CEO – Exide Energy Solutions.

Calibrated Hikes Sustain the 12-12.5% Corridor

• Margin guidance of 12-12.5% over Q3-Q4 FY 2026-2027 — at current lead and rupee levels, at the lower or higher end depending on the quarter; H2 FY 2026-2027 margins expected to stay within the current corridor.
• Cumulative price increases exceeding 10% since January 2026 — including one more round in October 2026 (Q3 FY 2026-2027); YoY price effect in FY 2026-2027 is ~9-10% on four-wheeler batteries and ~5% on two-wheelers. Management had purposely paused hikes in Q3 FY 2025-2026 to pass the GST 2.0 benefit to consumers.
• Depreciation to be higher in H2 FY 2026-2027 than H1 — as the full impact of assets capitalized on 23 September flows through; incremental depreciation was booked for only 7 days post-commissioning in Q2, while core business depreciation fell as some assets completed useful life. PP&E stood at Rs.8,140 crore including capital WIP of Rs.160 crore; ~Rs.5,300 crore invested in Phase 1.
• Lead-acid capex of ~Rs.400-500 crore per year to continue — roughly equal to annual depreciation, to protect the core business, now including brownfield debottlenecking to cater to the market after 2-3 years; additional lead-acid capacity under discussion as OEMs have approached Exide.
• Phase 2 lithium capex per GWh "could be" higher than Phase 1 — the USD appreciated ~10% during the Phase 1 build-out; land for 12 GWh purchased and utilities installed on the same giga campus, so Phase 2 lead time will be much shorter. Per CEO Avik Roy's personal view, Exide should wait for ~80% utilization before the Phase 2 decision (period unspecified).
• FY 2027-2028 and FY 2028-2029 capex guidance not yet disclosed — not presented to the board; future spend mostly for working capital and loss funding; advanced chemistry capex details expected to be disclosed in Q3 FY 2026-2027.

Cautious H2 OEM Outlook; PLI-Contingent BSS Roadmap

• OEM growth may moderate to low double-digit in H2 FY 2026-2027 — management's cautious percentage view, but absolute values are at a new level: quarterly PV industry volumes have risen from ~1.3 million to ~1.6 million (16 lakhs); October 2026 ran even stronger than September.
• Aftermarket expected to normalize in H2 FY 2026-2027 — to the same level achieved in H1 FY 2026-2027, aided by seasonal demand; management does not see it moderating much.
• Cash-neutral lithium plant targeted in 2 to 3 years — ≈ FY 2028-2029 to FY 2029-2030, characterized by management as "a very fair ask by global standards"; 80% utilization of the first GWh plant affirmed as achievable in 2-3 years, explicitly contingent on the company's operational excellence. Management declined any margin guidance for the plant, citing unpredictable dollar-per-kWh pricing.
• BSS roadmap contingent on PLI clarity — Exide is not currently testing BSS cells; Line 4 (planned BSS cell slightly above 300 Ah) can make multiple prismatic products if PLI does not materialize; 3W, telecom and 2W applications will be prioritized ahead of BSS.
• Government has announced 60% localization content for BSS — management is unsure whether this is at the AC or DC level, but batteries have been excluded; CEO said BSS without batteries is like "drilling and welding freight containers," so Exide is "not in that game" and will stick to batteries and cells.
• Telecom lithium economics caveat — Indian telecom operators shifted from AGM/VRLA to lithium-ion roughly ~1 year before the call, removing DG backup at BTS towers; management's understanding is lithium economics only holds without the diesel generator — if the DG set has to be reinstated, the economics "is not as attractive." Analyst Amish Thakkar cited reports of some Chinese telecom tower operators and industrial companies moving back to tubular lead-acid from lithium-ion on rising insurance premiums; management said it has "also heard this from certain quarters" but does not know whether it is right or wrong.
• HDFC Life mark-to-market loss of ~Rs.600 crore in H1 FY 2026-2027 — CFO Manoj Kumar Agarwal attributed the decline in the standalone investment base (~Rs.10,000 crore) to this MTM loss, stating it "may be the reason"; the loss is mark-to-market only, not an impairment, and there has been no reduction of the capital asset base in either the core or new energy business.