Industry profile: The global battery industry witnessed good growth during the past decade and holds immense growth potential for the future. The global market for batteries is expected to reach $86.6 billion by 2018. The industry is boosted by the growing demand for batteries in consumer electronic products and automotive vehicles. Growing demand for electric, hybrid electric, and plug-in hybrid electric vehicles are creating tremendous growth opportunities for the battery industry. Technological development, increasing disposable income of customers, development of the new application for batteries, and decreasing prices of raw materials for manufacturing the latest battery products further aided the battery Industry.
Trends are favorable for growth which should allow for participation by all players. However, there is a significant difference in growth potential among the application industries and regions and should yield better returns for suppliers positioned well in them.
True. There are some challenges for the industry in the disposal and recycling of lead-acid and Ni-MH batteries as they possess specific environmental issues. Hence, stringent ecological policies are there to govern the manufacturing as well as recycling of such storms. The industry also requires significant capital investments and sophisticated technological capabilities to manufacture lithium-ion batteries. Nevertheless, lithium-ion batteries in EV, HEV, and PHEV create enough growth opportunities. Demand for lead-acid batteries for SLI (starting, lighting, and ignition) purposes in automobiles contributed significantly to the industry’s growth. The demand for batteries having more power output with low weight at competitive prices will favor the increase in the consumer electronics segment.
Company profile: The Company is a leading Battery manufacturer in India. The Company designs, manufactures, markets, and sells a range of lead-acid storage batteries. The Company is operating through a Total of six plants. Bawal, Chinchwad, Ahmednagar, Haldia, Shamnagar, Hosur. It also has subsidiaries, Chloride International Limited, Chloride Power Systems and Solutions Limited, Chloride Metals Limited, and Exide Life Insurance Company Limited. It also has Foreign subsidiaries named Associated Battery Manufacturers (Ceylon)Ltd, Sri Lanka, Chloride Batteries S.E Asia Pte Limited, Singapore, Espex Batteries Limited, UK. The Company has nearly all leading automobile manufacturers as their customers. Nissan, JLR, Honda, General Motors, Bajaj auto, Toyota, Hyundai, Maruti, Eicher, Volkswagen, John Deere, Ashok Leyland Diageo, fiat, Mahindra, Yamaha, TVs hero, Royal Enfield, LML. An automotive battery is 75% part of revenue, 24% is industrial, and 1% is submarine. The Company manufactures batteries for the automotive, power, telecom, infrastructure projects, computer industries, railways, mining, and defense sectors.
Shareholding pattern: BSE Data.
Financials and ratios : [table id=169 /]
Future prospectus: In recent times, hardly there is growth, but the lithium-ion business is an ample opportunity. In recent times, the topline growth has been increasing. The price increase in the lead was a big headache, but it looks like it is history. The Company also owns an insurance business that it bought from ING Vyasa Bank before merging with Kotak. So all in all, I believe that it is the best time to own it.
