Exide’s Q4 FY26: Record Quarter, Margin Defence, and a Clear Push Into Lithium-Ion

Exide Industries ended Q4 FY26 with its highest ever quarterly revenue, supported by broad-based demand across most domestic verticals. Revenue for the quarter came in at 4,551 crore, up 9.4 percent year on year. Profitability improved faster than revenue. EBITDA rose to 530 crore, up 13.7 percent, and PAT increased to 312 crore, up 22.7 percent.

For the full year FY26, revenue was 17,269 crore, up 4.1 percent, with EBITDA at 1,943 crore and PAT at 1,111 crore. Management highlighted that FY26 growth was affected by a weak Q2, when demand paused ahead of a GST change window. Q3 and Q4, in contrast, were described as strong quarters.

The quarter also reinforced a pattern that investors have been watching closely. Exide is defending margins and earnings through a mix of price actions and internal cost control, even as non-lead input costs rise sharply. In parallel, it is funding a large lithium-ion cell manufacturing program through its subsidiary Exide Energy Solutions, with key milestones now moving from plant readiness into customer sampling and validation.

Q4 FY26 performance: growth was broad, but not uniform

Management described Q4 demand as favorable in India, supported by low inflation and low interest rates, and a rural revival. In Q4, the company said nearly 92 percent of the business grew by about 16 percent, including the entire domestic business excluding telecom.

Key growth drivers cited for the quarter included 2W and 4W OEM, home UPS, solar, replacement demand in 2W and 4W, and industrial infrastructure excluding telecom. Management also stated that domestic business sales grew 12.5 percent year on year.

The weak links were exports and telecom. Exports were described as subdued due to geopolitical tensions, while telecom and e-rickshaw were noted to be shifting towards lithium-ion technology. In a Q and A exchange, management broadly agreed with an investor estimate that exports are around 5 percent of revenue, and telecom plus a part of e-rickshaw is around 3 percent.

Financial snapshot

Note: FY26 PBT was stated as before an exceptional item of 9 crore.

Margin defence amid commodity inflation: price actions plus cost control

The most important part of Exide’s earnings commentary was its description of commodity inflation and how it flowed through to margins.

Management said the net negative impact from material cost inflation in Q4 was about 150 crore. It also stated gross margin declined by around 90 basis points, with gross margin moving from 31.6 percent in Q3 to 30.1 percent in Q4. Yet EBITDA margin held sequentially at 11.7 percent.

The bridge, according to management, was disciplined control over operating costs. It pointed to better control of factory costs as a percentage of sales, employee costs, and a reduction in warranty cost as a percentage of sales.

On pricing, the company indicated it consciously avoided a price hike in Q3 after the revised GST rates were announced, with an intent to pass the benefit to consumers. But from January onward, it started taking stage-by-stage increases. Management described three tranches during Q4 and another correction in April, with the April 1 price hike around 3 percent.

It also signalled that more price hikes may be necessary. April exit prices were stated to be higher than March exit prices for key inputs, and management said the company had no option but to raise prices if inflation persists.

For OEM contracts, management said escalation is typically with a lag and described that lag as roughly a quarter.

Core business outlook: cautious optimism, exports remain uncertain

Entering FY27, management said the outlook for the lead-acid business remains positive across most verticals, but it will remain cautiously optimistic and monitor demand in case inflation rises.

On exports, it expects geopolitical uncertainty to remain for at least the first half of the current year. At the same time, it sees upside because the baseline is now low after the decline, and it reiterated its focus on Western Europe and the US as target markets.

The investor presentation also highlighted several structural strengths that underpin the core business. These include a wide application portfolio, nationwide distribution and service, integrated manufacturing with captive recycling, and a debt-free balance sheet with strong credit ratings.

New energy: a large investment, moving into sampling and validation

Exide’s lithium-ion program is anchored under Exide Energy Solutions Limited. Management disclosed that it invested 600 crore in Q4 and about 1,500 crore in FY26 into the project. Total equity investment into Exide Energy till date was stated at 4,802 crore.

On next year’s funding needs, management stated there is a board-approved plan to invest 1,400 crore in FY27, which includes capex as well as opex and working capital needs for Phase I.

Milestones and timing

Management said internal validations for cylindrical cells were completed and customer sample delivery was expected around May or June 2026. For prismatic cells, it said it is running trials for customer samples and is targeting June to July for sample handover.

It also clarified an important commercial nuance. Cylindrical production may begin earlier, but the revenue stream could start earlier from prismatic (LFP) lines because these products may face less stringent homologation cycles compared to two-wheeler OEM validation.

Phase I capacity and applications

Management described Phase I capacity as 6 GWh, split equally between cylindrical and prismatic.

• 3 GWh cylindrical capacity was stated to be targeted at two-wheeler applications.
• 3 GWh prismatic capacity was described as usable for four-wheelers, buses, and stationary applications such as telecom and BESS.

The presentation also emphasized progress indicators such as utilities nearing completion across lines, equipment on-site, MPAs signed for supply chain readiness, and a shopfloor team supporting trials and commissioning.

Cost competitiveness: yield and utilisation as the critical levers

On the economics of cell manufacturing, management and the Exide Energy CEO emphasized that yield is the most critical factor governing cell cost. The target yield level stated was 90 percent, and management suggested that strong utilisation above 85 percent is needed for competitive costing.

It also acknowledged that raw materials are currently imported largely from China, implying the initial cost base may not be optimal. However, Exide Energy stated it is targeting the imported landed cost through scale, yield improvement, and some localisation as domestic suppliers develop.

A supportive point raised was that changes in China’s VAT structure were expected to raise imported cell costs over time, which could narrow the gap for domestic producers.

What to track from here

Exide’s FY26 commentary makes one thing clear. The company is managing a traditional lead-acid franchise through a volatile cost environment while building a large new energy business from scratch.

Near-term tracking points are straightforward.

In the core business, investors will watch how quickly price hikes catch up with non-lead inflation, and whether demand remains resilient in the domestic market. Exports and telecom are likely to remain swing factors, given management’s explicit comments on geopolitical uncertainty and the technology shift in telecom.

In new energy, the next visible milestones are customer sample deliveries, validation cycles, and the first formal disclosure of commercial supply start. Management itself framed the ramp in practical terms: reaching high utilisation and a 90 percent yield level.

Exide’s Q4 showed that the core business can still deliver a record quarter and defend EBITDA margins through execution. The next phase will test whether the new energy investment can translate into repeatable manufacturing outcomes, customer validation wins, and meaningful revenue flows.