Exide Q1 FY27: Core strength delivers, while the gigafactory steps into sampling

Exide Industries began FY27 with a strong operating quarter. Revenue for Q1 FY27 rose to INR 5,305 crore, up 17.6% year on year. Profitability also improved in step. EBITDA increased to INR 655 crore, up 19.5%, with EBITDA margin at 12.4% versus 12.2% a year ago. PBT came in at INR 543 crore and PAT at INR 407 crore, both up more than 25% year on year.

Management described the demand environment as supportive, helped by better affordability and consumer sentiment after GST rationalisation. Replacement demand remained robust across rural and urban markets. At the same time, the cost backdrop stayed tight. The company pointed to elevated input costs driven by disruptions in West Asia and adverse rupee movement against the US dollar, even as lead prices in dollar terms were largely range-bound. Exide said it took calibrated price adjustments to partly offset the impact.

What drove the quarter

The management commentary suggested Q1 FY27 growth was broad-based across major lines of business. The company highlighted momentum in automotive OEM, home UPS, solar, replacement, industrial infrastructure excluding telecom, and exports.

A key nuance was seasonality. Exide noted Q1 is historically its strongest quarter because it coincides with peak summer demand for inverter batteries. That seasonal tailwind was visible this year as well.

In the Q and A, management also gave directional colour on volumes. It said volume growth was double digit in most businesses and cited examples such as four-wheeler replacement volume growth of 10%, four-wheeler OEM at 21%, two-wheeler OEM at 20%, and solar at about 12% to 14%. It also clarified there were no new contract wins driving the quarter and called it business as usual.

Cost control, pricing and operating levers

Even with currency and commodity headwinds, Exide expanded margins. Management attributed the improvement to higher revenues, cost control through its cost excellence program, and an efficient supply chain.

On pricing, management said that on a year on year basis, price correction was in the range of 4% to 6% across categories in Q1. It did not commit to a specific price action for Q2, stating decisions would be taken dynamically based on input costs.

The company also reiterated balance sheet strength. The investor presentation and management comments both emphasised a zero-debt position, healthy liquidity and strong operating cash flows, supported by ICRA AAA stable and A1+ ratings.

New energy: from commissioning to customer samples

The strategic centre of attention remains the lithium-ion gigafactory under Exide Energy Solutions Limited. Management said all equipment across four production lines has been delivered and installed, and utilities are fully operational.

During the quarter, the first NMC cylindrical line commenced customer sample deliveries. The LFP prismatic line also began sample supplies for three-wheeler and telecom applications. The company also highlighted completion of key certifications including BIS standards and UN 38.3.

However, management remained careful about operational disclosures. It said yields are improving, but full yield visibility requires running the plant on three-shift operations. It avoided sharing yield numbers at the sampling stage.

On demand, the commentary was more confident. Management said demand should not be an issue because many EV packs today use imported cells and existing markets can shift to locally produced cells. It described early focus on two lines, one NMC and one LFP, with the ability to load these lines as yields stabilise.

The company reiterated that revenue contribution from the Bengaluru plant is expected during FY27. It also reiterated a first-year utilisation expectation of about 25% to 30%.

Capex and investment disclosures

The investor presentation stated that Rs 4,902 crore has been invested till date into the new energy program, with revenue generation expected in FY27. In the concall, management reiterated cumulative equity investment into Exide Energy Solutions Limited stood at INR 4,902 crore as on 31 July, including INR 100 crore invested in July.

For FY27, management said the Board has already approved INR 1,400 crore of investment into the new energy subsidiary, with the remaining amount to be deployed over the coming months.

For the core lead-acid business, management said it typically keeps around INR 500 crore annually for manufacturing technology, automation and capacity expansion. It also said capacity investments are often focused on bottlenecks rather than complete new lines, with particular attention to four-wheeler capacity.

Supply chain realities: localisation is a multi-year path

A recurring theme in the Q and A was localisation. Management framed the plant as an Indian advanced chemistry cell platform, but also clarified current dependence on imported raw materials.

It said raw materials are currently sourced from China and that domestic raw material sourcing could take 3 to 5 years to develop. For electrolyte, management said it will be fully imported initially through the established supply chain of technology partners, with parallel pilots underway with Indian suppliers.

The company shared an internal roadmap target of localising about 50% to 60% of bill of materials over the next 2 to 3 years, contingent on ecosystem development.

Market context and demand levers

The investor presentation positioned India’s lithium-ion market as moving from import-led to localisation-led. It cited a current market of about 25 GWh in 2026 and a demand potential of 140 to 150 GWh by 2030 across EV and stationary applications, with 60% to 70% expected to come from EVs by 2030.

In the core business, Exide pointed to structural demand drivers such as low passenger vehicle penetration, replacement cycles, rural recovery, solar adoption supported by GST reduction and government schemes, and infrastructure capex including data centres.

Takeaways from Q1 FY27

Exide’s Q1 FY27 readout reinforced two parallel narratives. The lead-acid core continues to deliver growth with steady margins, supported by network depth, OEM relationships and diversified applications. At the same time, the new energy business is progressing into the sampling and certification phase, with management targeting initial revenue during FY27 and a gradual ramp as yields and approvals stabilise.

The quarter’s key message was disciplined execution. The company is leaning on its balance sheet strength and core cash generation while funding a multi-year transition into advanced chemistry cells. The near-term performance is anchored by the core, while the medium-term re-rating depends on how quickly the gigafactory converts samples into repeat commercial orders and sustainable utilisation.