On Wednesday, Citi revised its price target for Exide Industries Ltd. (EXID:IN), reducing it to INR610.00 from INR630.00, while retaining a Buy rating on the stock.
The adjustment follows Exide Industries' first-quarter financial results for fiscal year 2025, which fell short of expectations due to lower-than-anticipated revenue, suggesting a slowdown in demand. Citi is looking for further insight from the company's management regarding the demand trends across different segments.
Despite the disappointing first-quarter results, Citi remains optimistic about Exide's future, particularly noting that the development of the Lithium-ion cell plant is on track. The firm's stance is cautious, however, as they monitor the core business's demand momentum closely. In light of these factors, Citi has revised its earnings estimates for fiscal years 2025 to 2027 to account for a more moderate demand outlook.
The financial institution has applied a valuation multiple of 22 times the estimated earnings for September 2025 to Exide's core business, which underpins the new target price. The reduction in the target price reflects the revised earnings forecasts and the current assessment of the company's valuation.
Exide Industries has not provided comments on the potential impact of the General Elections or the recent heat wave on the replacement demand, which are factors that could be influencing the observed demand patterns. The slowdown in commercial vehicle (CV) sales is also thought to possibly have affected the demand for Exide's products.
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