Exide Industries reported a positive Q3 FY26, driven by 92% of the business growing by 12% in top line, despite commodity pressures. Management noted a 175 bps sequential gross margin improvement and 220 bps sequential EBITDA margin expansion. Key focuses moving forward include strong automotive demand, continued growth in Inverters and Industrial Infra, and significant capital expenditure planned for the expanding lithium-ion segment.
Q3 FY26 Performance Snapshot
Exide Industries held its Earnings Conference Call on February 03, 2026, to discuss Q3 FY26 performance. CEO Mr. Avik Roy highlighted the positive impact of GST 2.0 reforms, which drove demand across multiple segments, leading the company to defer price corrections for consumer benefit despite rising commodity costs.
The overall macroeconomic scenario was positive, supporting increased purchasing power. Nearly 92% of the business grew by around 12% on the top line. Key growth contributors included Auto OEM, Auto Aftermarket, Industrial Infra, and Inverters. Industrial Infra saw improved year-on-year performance in B2B sectors like Railways, Traction, and Industrial UPS.
Headline sales growth was around 5% YoY, though domestic growth (excluding telecom) stood at 10%. Notably, the company crossed a top line of INR 4,000 crores for the first time in a Q3.
Margin and Cost Management
Despite raw material cost pressures, especially metals (silver, tin, copper) hitting near all-time highs, the company focused on cost excellence projects. This resulted in a 175 basis points gross margin improvement sequentially. The YoY EBITDA margin for Q3 stood at 11.7%, expanding by 220 basis points sequentially. Adjusted pretax profits grew by 12.8% when adjusting for one-time impacts.
Management confirmed taking one round of price correction in January (a 2% hike) to offset commodity increases other than lead, though they noted that metal prices need to stabilize to assess full recovery.
Segment Deep Dive: Automotive and Industrial
Automotive Sector
Both Auto OEM (+25% YoY) and the 2W/4W replacement market (double-digit growth) were robust, hitting their highest ever quarterly revenue in Q3. This momentum is expected to continue into Q4.
The automotive replacement ratio to OEM is approximately 73%-75% in trade and 25%-27% in automotive (OEM).
Industrial and Exports
The Industrial business (non-automotive) constitutes about 30% to 32% of revenue. An uptick was seen in railways (due to new replacement policies), industrial UPS (driven by data centers), and motive power (e-commerce related warehousing). Data center revenue contributed INR 75 crores to INR 100 crores quarterly.
The telecom business, which was previously a significant segment, has declined to only 1% of revenue in Q3 and is considered largely bottomed out, with future volumes likely shifting to lithium solutions.
Inverters and Solar
Home inverters and Solar verticals returned to growth trajectory in Q3. The share of inverter revenue is expected to be about 25% during the peak season (March to July), averaging around 20% on a full-year basis.
Lithium-Ion Business Updates (Exide Energy Solutions)
The management confirmed that INR 1,400 crores in equity funding has been approved for Exide Energy Solutions (EESL) for the full fiscal year to manage capex and working capital.
Regarding capacity progress:
- Cylindrical Line (Line 1) internal validation is in progress, with customer samples next.
- Prismatic Line (Line 3) is nearing internal acceptance criteria; sample manufacturing starts next month.
- Line 4 installation and commissioning are planned by April.
- The LFP prismatic line will initially serve the 3-wheeler and E-rickshaw market.
Commercial dispatches for the large EV OEM customers are anticipated around March or April. The initial lithium cell capacity mix (LFP and NMC) is planned to be 50:50.
On margins, management indicated that lithium-ion margins should be more stable as the main component (lead) is indexed, and they aim for margins higher than lead-acid OEM business but lower than lead-acid trade margins.
Capex Outlook
For the lithium business, INR 1,400 crores in equity is planned. For the core lead-acid business, the company plans capital expenditure of approximately INR 500 crores annually, consistent with depreciation levels, focusing on technology, automation, and cost competitiveness.
Source: BSE
