Battery Stocks In India: Recent years have been revolutionary for the battery industry. With global calls to reduce global warming, and countries like India dedicated to their carbon footprint goals, the renewable energy sector hasn’t seen this much commotion since its inception.
Naturally, investing community will have their eyes set on the top companies in the battery industry to carry the change in the future.
In this blog, we’ll talk about the Indian battery industry and how it’ll impact the movement of battery stocks in India.
The Indian Battery Sector
When the present dependence on fossil fuels gradually shifts towards renewable energy, all eyes will be on the battery and EV segment as the shift of power makes renewable energy companies the new Big Energy titan.
Keeping this in mind, investors and innovators have their eyes on some of the biggest names in this segment.
On a global scale, the world is keen to see the world’s richest man and tech billionaire Elon Musk’s plans for expanding his EV company, Tesla, and his vision for Solarcity.
In India, the battery sector already has a presence in powering everything from appliances, torches, and smartphones to bikes, cars, and high-power machinery.
According to the Ministry of Road Transport and Highways, India, India currently has 1.39 million EVs on Indian roads as of August 2022.
In a matter of just 8 years, this figure is expected to grow to a phenomenal 45-50 million EVs by 2030 and create just as many jobs in the same period.
Currently, the battery segment is dominated by storage lead-acid batteries that are dominantly used in scooters, bikes, cars, and emergency power supply units.
For the EV segment to take a significant share in the current Indian automotive market, these battery stocks in India will be watched for what’s to come.
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Battery Stocks In India – Table
The table below shows all the top battery stocks in India.
|S. No.||Company Name||Market Cap (Rs. In Cr.)||CMP|
|2||Amara Raja Batteries||9694.65||568.35|
|3||HBL Power Systems||2785.81||100.5|
|5||High Energy Batteries (India)||294.06||328.05|
1. Exide Industries
At #1 in our article about Battery Stocks In India, we have the number 1 battery maker in the country – Exide Industries.
Presently, Exide Industries dominates the lead acid battery industry, with a market share of over 60% in 3/4W and 65% in the 2W organized lead acid battery segment.
(Source – The Economic Times) Exide Industries has an industry presence of over 75 years, making them one of the oldest indigenous battery manufacturers in the country.
According to their annual report, they have 10 manufacturing plants, all strategically located in close proximity to automotive hubs.
Exide has exclusive agreements with multiple automotive manufacturers for their batteries, including Maruti Suzuki, Hyundai, and Morris Garage Motors (MG Motors).
Financial Performance Of Exide Industries
|CMP||₹ 184||Market Cap (Cr.)||₹ 15,657 Cr.|
|ROCE||10.6 %||ROE||48.6 %|
|Face Value||₹ 1||Book Value||₹ 129|
|Promoter Holding||45.99%||Price to Book Value||1.42|
|Debt to Equity||0.05||Dividend Yield||1.32 %|
|Net Profit Margin||33.9 %||Operating Profit Margin||10.4 %|
Exide Industries is the biggest listed company in this segment, with a market cap exceeding ₹15K crores. The mid-cap battery maker posted its best year in terms of net profits in FY2022.
For the year ending FY2022, they post revenues of ₹12,789 crores. PAT for that year was ₹4,357 crores, the highest ever in the past 10 years.
They arrived at this figure with an operating profit margin (OPM) of 11% and an exceptionally low tax rate of just 6% and an exceptional income of ₹3,745 crores.
Over a period of 5 years, the sales growth of Exide Industries has been quite low at just 2.73%. Exide has maintained a healthy and low debt-to-equity ratio of 0.05, showing they have maintained debt at very low levels.
The P/E ratio of Exide Industries is 20, and compared to the industry P/E of 25.1, shows that it is slightly undervalued.
The promoters of Exide Industries, Chloride Eastern Ltd, own almost 46% of the company. Their holding has remained steady, with no significant buying and selling activities.
5-year returns of Exide Industries have left investors poorer by 16.7% than when they bought the stock in 2018.
2. Amara Raja Batteries
The automotive battery sector is dominated by just two companies. Of the two, we covered Exide Industries above. The other battery maker is Amara Raja Batteries.
Here’s an interesting fact about the battery maker – The Taj Mahal, one of the 7 wonders of the world, is powered by Amara Raja’s batteries.
Beyond the manufacturing of lead-acid batteries for automobiles, the company is also involved in the industrial battery sector, power distribution, power projects, and electronics manufacturing.
Financial Performance Of Amara Raja Batteries
|CMP||₹ 582||Market Cap (Cr.)||₹ 9,940 Cr.|
|Face Value||₹ 1||Book Value||₹ 292|
|Promoter Holding||28.06%||Price to Book Value||1.99|
|Debt to Equity||0.02||Dividend Yield||0.84 %|
|Net Profit Margin||6%||Operating Profit Margin||11.4 %|
The 2nd largest battery maker, Amara Raja is a mid-cap company with a market capitalization of ₹9,940 crores. Their FY 2022 results show that they had revenues worth ₹8,696 crores, the highest in the company’s 10-year history.
The same cannot be said for their profits, which have come down. In FY2020, the company posted sales of ₹6,839 crores and with an OPM of 16%, made a net profit of ₹661 crores.
But in FY 2022, the company posted a net profit of only ₹511 crores. Even though revenues have grown year on year, the company’s OPM has reduced to one of its lowest figures at just 12%.
The company’s 5-year sales growth is lower than ideal at just 10.3%. On the plus side, Amara Raja has maintained a low and healthy debt-to-equity ratio of 0.02 and the stock P/E of 17.2 is lower than that of its industry (25).
Coming to the shareholding, Promoters own a very low stake in the company – 28 percent. An interesting shift is the sudden buying by FIIs in the battery maker.
Between the quarter ending September 2022 and December 2022, FIIs have almost doubled their stake from 18.47 percent to 35.49 percent.
The 5-year returns of Amara Raja Batteries would have wiped out 29.3% percent of investors’ wealth.
3. HBL Power Systems
HBL Power is an industrial battery manufacturer, founded in 1977.
The battery manufacturer has a global presence, with most of their products being used in industrial applications such as telecom, data centers, hospitals, battery energy storage systems, and even defense.
The company makes lithium-ion batteries and VRLA, nickel-cadmium, and pure lead batteries.
Financial Performance Of HBL Power Systems
|CMP||₹ 99.2||Market Cap (Cr.)||₹ 2,747 Cr.|
|Face Value||₹ 1||Book Value||₹ 32.2|
|Promoter Holding||59.0 %||Price to Book Value||3.12|
|Debt to Equity||0.08||Dividend Yield||0.63 %|
|Net Profit Margin||6.93 %||Operating Profit Margin||12.3 %|
When pegged next to the 2 biggest battery stocks in India, HBL Power is comparatively smaller in terms of size and market cap. The small-cap company has a market capitalization of ₹2,747 crores.
The FY 2022 annual revenues of the company stood at ₹1,236 crores, which is almost ₹367 crores than their 2018 revenues.
However, the company has improved its profit margins over the years, from a low 8 percent OPM in 2018 to 11 percent. Additionally, taxes have also been reduced from 42 percent to 23 percent.
This explains how their net profits tripled from ₹32 crores in 2018 to ₹94 crores in 2022, despite lower revenues.
The company has maintained an excellent debt-to-equity ratio of 0.08, indicating healthy debt management. The stock P/E of 27.8, puts it quite below its industry P/E of 61.7, indicating a severe undervaluation of the stock price.
ROE and ROCE of the company have been on the low end of ideal, at 10.4 percent and 13.4% respectively. Coming to the shareholding pattern, promoters own the biggest stake in the company – 59.02 percent.
There has been a pattern of gradual stake increase over the past 2 years. As of June 2020, the promoters held 57.85 percent.
The 5-year return of HBL Power Systems is 54.52 percent, giving investors more than half their investment back via capital appreciation.
4. Eveready Industries
The batteries for your favorite remote control cars, TV remotes, flashlights, and wall clocks – All powered by one of the most reputed battery manufacturers in India – Eveready Industries.
The company is one of the few battery manufacturers that can compete with foreign competitors like Duracell and still maintain a market presence.
Eveready Industries has been in business for over 100 years, and they’ve diversified from appliance batteries to lighting products, flashlights, commercial and consumer lighting, and various applications for their batteries themselves.
Financial Performance Of Eveready Industries
|CMP||₹ 371.85||Market Cap (Cr.)||₹ 2,651 Cr.|
|ROCE||14.0 %||ROE||17.2 %|
|Face Value||₹ 5||Book Value||₹ 45.1|
|Promoter Holding||43.2 %||Price to Book Value||8.3|
|Debt to Equity||1.19||Dividend Yield||0.00 %|
|Net Profit Margin||3.82 %||Operating Profit Margin||7.04 %|
Eveready Industries went public in 2005, and they are a small-cap battery manufacturing company with a market capitalization of ₹2,651 crores.
In the latest annual revenues of the company (FY-2022), the company posted revenues of ₹1,207 crores, down from ₹1,456 crores in FY-2018.
Operating profit margins (OPM) have improved by 3 percent in the same period. The latest net profits of the company are ₹ 46 crores for FY 2022, which is slightly lower than ₹53 crores five years prior.
The company has had an ideal ROE of 17.2 percent and a ROCE of 14 percent. The stock PE of 121 is almost double that of the industry P/E of 61.7, which could mean that the stock is highly overpriced or investors are willing to pay a premium for the stock.
The D/E ratio of Eveready Industries is 1.19, above the ideal figure of zero to one.
The latest shareholding data shows that promoters own a 43.21 percent stake in Eveready Industries (September 2022). This is a sharp jump from 4.8 percent in the quarter ending June 2022.
The 5-year returns of Eveready Industries are in the negative, leaving your investment down by 17.7%, had you invested in the stock in 2018.
The EV market in India is valued at $2 billion dollars by 2023 and more than triple to $ 7.09 billion dollars by 2025 (Invest India). We all know how important the battery sector is to the EV industry.
Before investing in these battery stocks in India, you should conduct extensive research about the industry, the companies, changes in government policies, R&D being done in the industry, and the competition in the industry at the moment.
That’s all for this blog on the top battery stocks in India. We hope you found this blog interesting and educational. Happy Investing!
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