Exide Industries registered double-digit growth in export of automobile batteries, banking primarily on new markets like South Africa and the US, while consolidating its position in existing ones.

Expanding distributor base, launching products and investing in strengthening of brands led to “record growth in the export market”, the Kolkata-based company said in its annual report.

Exports account for nearly 8 per cent of the turnover. Exide reported over ₹10,000 crore in turnover in FY21 with 26 per cent coming from the industrial sector and the remaining coming from automotive.

Exports grew in existing markets like the Middle East, Africa and the rest of the world region, while the company made “significant in-roads in GCC countries like Saudi Arabia” with the UAE office allowing it to stay connected to vendors.

South Asian businesses witnessed a “de-growth” with the pandemic “slowing down businesses (there) significantly”.

In India, despite a slowdown in auto sales in FY21, the company entered into tie-ups with Maruti, Nissan and Tata Motors with models like New Maruti Suzuki Swift-ISG, Nissan Magnite (Petrol) and Tata Motors Safari being launched with ‘Exide-only batteries’. In India, it has tie-ups with over 75 OEMs.

However, Exide maintains that “with many players fighting for market share in the lead acid battery space” its (market) dominance “will face some pressure”.

“The (business) outlook will depend upon the pandemic’s resurgence, which has already started impacting the recovery process,” it said on the future prospects of the segment.

Overall, there was a slowdown in the industrial battery segment, especially in the first half of last fiscal.

Industrial batteries

Exports in the industrial sector include sale of storage batteries for material handling equipment such as cranes, pallet-trucks and forklifts. With slowdown in economic activities and border closures across the globe, exports in the industrial sector continued to be impacted in the first two quarters of last year (April to September).

However, the segment continued to witness “steady demand” and “clocked double digit growth in the second half of the fiscal” (performing better than the previous year) as e-commerce activities resumed and picked upleading to increased demand for storage batteries across devices, equipment and vehicles being used in warehouses and for material handling. The segment “almost bounced back” to “match its pre-Covid level performance”.

The solar battery segment continues to face challenges because of financial issues – like increase in module prices impacting project viabilities and stalling construction activities.

“We can expect decent growth in the industrial UPS business while the solar division also shows a lot of promise, with a decent order book in place. The government policy to buy only India-made products with more than 95 per cent raw materials (in the country) is likely to eliminate some competition,” it said in the business outlook adding that the industrial exports market “is expected to be under stress in the coming year due to restrictions imposed by several countries”.

Investments in subsidiaries

In FY21, the company invested close to ₹100 crore across two of its subsidiaries.

Around ₹66 crore went into raising stake to 80 per cent in its lithium-ion battery making subsidiary Exide Leclanche Energy Private Limited (called NexCharge).

Another ₹35 crore was invested as capital and other funding requirements for the upcoming greenfield facility at Haldia (West Bengal) of Chloride Metals Limited (CML), a secondary smelting & refining unit that is promoted as a part of backward integration to meet the lead and lead alloys demand of the company. The Bengal unit — the third after Pune and Karnataka — is expected to be operational in FY22 with a capacity of 110,000 mt.

Related Topics
comment COMMENT NOW