Exide targets FY’26-end launch for lithium cell production

Exide Industries on Monday said it plans to begin production at its lithium-ion cell facility by the end of FY’26, with equipment installation and commissioning now in the final stages.

The company said it is in advanced discussions with major two-wheeler OEMs for its lithium cells, and two of them are likely to be its first customers. In its post-earnings analysts’ call, the management said the initial output will be an “NCM-based cylindrical cell line” for two-wheeler applications, followed by a prismatic LFP line for stationary storage.

Exide said its total equity investment in its wholly owned subsidiary, Exide Energy, stands at Rs 3,947 crore as of October, including Rs 580 crore infused in the first half of FY’26 and another Rs 65 crore last month.

The management said utilisation will first be ramped up to 60 per cent and then to 90 per cent, adding that at steady-state levels of around 80–90 per cent, margins should be in line with Exide’s existing lead-acid margins based on global benchmarks. Pricing will be determined through a mix of import parity and cost-plus, with local cell production expected to attract a premium amid supply uncertainties and quality control advantages for OEMs.

The company said its proposed 12 GWh Phase-II expansion will be taken up once there is more visibility on market adoption, particularly in stationary storage. Exide added that it passed on the GST cut to consumers and has not made further price adjustments. The GST rate on batteries was reduced from 28 to 18 per cent from 22 September.

Despite a softer July–September quarter, reduced production helped bring down inventory and improved working capital, unlocking over Rs 500 crore. Inverter and solar batteries were the most affected, with solar revenue growth falling from 35 per cent in Q1 to minus 5 per cent in Q2 FY’26.

Domestic automotive replacement demand remained strong, with high single-digit to double-digit growth in both two- and four-wheeler categories. The company expects a rebound in Q3 as deferred purchases return and aims to maintain margins in the 12–13 per cent range, supported by cost-efficiency initiatives and manufacturing upgrades.

Exide said most of its two-wheeler battery lines have shifted to punch technology and the full motorcycle capacity is expected to transition by the end of the calendar year. It also made the required provisions in Q2 to comply with extended producer responsibility (EPR) norms under the new battery waste management rules. The company expects this to become a recurring cost that will eventually reflect in pricing, potentially supporting a premium for fully recycled products.