Exide Industries Ltd (CMP-Rs 70.15)

The company is looking to double its overall production capacity within two years and expects to close the next fiscal with revenues of $ 1 bn (Rs 40 bn). It has nine plants and is doubling the existing capacity from 5 mn to 11 mn batteries in all these plants. The entire expansion plan is poised to be completed by the next fiscal with an investment of about Rs 2 bn to Rs 2.5 bn p.a. The company also aims at changing the product mix of automotive segment and other industries from 60:40 at present to 50:50 in the next few years due to demand from multiple industrial applications. The stock is trading at 25.1 x its TTM earnings of Rs 2.8. We recommend ‘Accumulate’.