EV inventory to purchase now for an upside of greater than 25%; Are you holding it?

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The shares of the world’s fourth-largest automotive and industrial battery producer gained 5.6 p.c to ₹ 398.05 per share after US Funding Financial institution, JP Morgan, gave a ‘purchase’ suggestion with a 25 p.c upside 

At 12:45 p.m. on Tuesday, on the Nationwide Inventory Change, Exide Industries Ltd. shares had been buying and selling at ₹387, exhibiting a rise of two.61 p.c from the earlier shut. 

Exide Industries Ltd is the world’s fourth-largest producer of automotive and industrial lead-acid batteries Exide Industries Ltd. is primarily engaged within the manufacturing of storage batteries and allied merchandise. 

Exide Industries Restricted provides batteries for submarines, together with high-end submarine batteries. Exide Industries Restricted can be concerned within the growth of indigenous Kind-IV class submarine batteries. 

The corporate reported a 12 p.c enhance in income 12 months on 12 months, from ₹3,538 crore in Q3FY23 to ₹3,980 crore in Q3FY24. Throughout the identical interval, web revenue elevated by 2.5 p.c, from ₹198 crore to ₹203 crore. 

Exide Industries Ltd shares have gained 50% within the final six months and 111 % within the final 12 months. 

Primarily based on a robust outlook on Exide Industries Ltd., a worldwide analysis and broking agency, JP Morgan has given an obese score on the inventory with a goal value of ₹ 480, representing a 25 p.c enhance from Tuesday’s buying and selling value of 384 per share. 

The brokerage revised the valuation of EXID’s EV battery enterprise upward, elevating it from Rs 25 per share to Rs 173 per share. This adjustment displays a rise in capability utilization assumption from 70% to 87.5%, pushed by heightened confidence following the Hyundai-Kia tie-up. 

In a be aware, JPMorgan emphasised that Exide Industries’ profitable partnership with a distinguished world authentic tools producer (OEM) alleviates many investor issues. It additionally indicated that extra order wins may very well be imminent as the corporate stays engaged in discussions with a number of OEMs.

On April 8, 2024, Hyundai Motor Firm (HMC) and Kia Company, main automotive firms primarily based in South Korea, entered right into a Memorandum of Understanding (MOU) with Exide Power Options Ltd to fabricate electrical automobile batteries in India and provide them for the upcoming EV fashions of Hyundai Motor. 

Exide Industries intends to speculate between ₹4,500 to ₹5,000 crore in constructing a battery capability of 6 GW, of which ₹1,820 crore has already been invested. This funding displays a valuation of the lithium enterprise at 1 instances its estimated FY 2026 price-to-book ratio (P/B ratio), as per a report by Morgan Stanley. 

Written by Omkar Chitnis

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