Exide Industries Ltd Reports Stabilised Quarterly Performance Amid Market Challenges

Quarterly Financial Trend: From Negative to Flat

Exide Industries’ latest quarterly results indicate a shift in its financial trend parameter from negative to flat, with the score improving to -2 from -10 over the past three months. This change suggests that while the company has halted the decline seen in earlier quarters, it has yet to achieve meaningful growth or margin expansion. The flat performance is a mixed signal for investors, highlighting a period of consolidation rather than recovery.

The company’s revenue growth has plateaued, reflecting subdued demand in the auto components and equipment industry. This stagnation is partly attributable to broader macroeconomic factors impacting the automotive sector, including supply chain disruptions and fluctuating raw material costs. Exide’s ability to navigate these headwinds will be critical in determining its trajectory in the coming quarters.

Margin Analysis and ROCE Concerns

One of the key challenges for Exide Industries remains its margin profile. The company’s return on capital employed (ROCE) for the half-year period stands at a low 8.11%, the lowest in its recent history. This figure is significantly below industry averages and raises concerns about operational efficiency and capital utilisation.

Margin contraction has been a persistent issue, driven by rising input costs and competitive pricing pressures. While the company has taken measures to optimise costs, these efforts have yet to translate into margin expansion. Investors will be watching closely for any signs of improvement in cost management or pricing power that could enhance profitability.

Stock Price and Market Performance

Exide Industries’ stock price closed at ₹321.50 on 31 January 2026, a modest increase of 0.27% from the previous close of ₹320.65. The stock’s 52-week high remains at ₹430.85, while the 52-week low is ₹313.00, indicating a wide trading range over the past year. The current price is closer to the lower end of this range, reflecting investor caution amid the company’s financial challenges.

In terms of relative performance, Exide’s stock has underperformed the benchmark Sensex across multiple time frames. Over the past one month, the stock declined by 10.15%, compared to a 2.84% drop in the Sensex. Year-to-date, the stock is down 11.26%, while the Sensex has fallen 3.46%. Over the one-year horizon, Exide’s stock has decreased by 10.72%, contrasting with the Sensex’s 7.18% gain.

However, the company’s longer-term performance shows resilience, with a three-year return of 82.20% outperforming the Sensex’s 38.27%. Over five and ten years, the stock has delivered 66.19% and 167.36% returns respectively, though these lag behind the Sensex’s 77.74% and 230.79% gains. This mixed performance underscores the cyclical nature of the auto components sector and the importance of strategic execution.

Mojo Score and Market Sentiment

Exide Industries currently holds a Mojo Score of 41.0, reflecting a cautious market stance. The company’s Mojo Grade has been upgraded from Strong Sell to Sell as of 22 December 2025, signalling a slight improvement in outlook but still indicating significant risks. The Market Capitalisation Grade remains low at 2, consistent with its mid-cap status and the challenges it faces in scaling operations.

These ratings suggest that while the company has stabilised its financial performance, it has yet to demonstrate a convincing turnaround. Investors should weigh these factors carefully, considering both the potential for recovery and the risks posed by ongoing margin pressures and subdued returns.

Industry Context and Competitive Landscape

The auto components and equipment sector is currently navigating a complex environment marked by evolving consumer preferences, regulatory changes, and technological shifts towards electric vehicles. Exide Industries, as a key player in this space, must adapt to these dynamics to sustain growth.

Competition remains intense, with peers investing heavily in innovation and cost optimisation. Exide’s ability to leverage its brand, expand product offerings, and improve operational efficiencies will be crucial in maintaining market share and improving financial metrics.

Outlook and Investor Considerations

Looking ahead, Exide Industries faces a critical juncture. The flat financial trend suggests that the company has arrested the decline but must now focus on driving growth and margin improvement. Key areas to monitor include raw material cost management, product innovation, and capital allocation efficiency.

Investors should also consider the broader economic environment and sector-specific trends, such as the pace of electric vehicle adoption and regulatory developments. While the company’s long-term track record demonstrates resilience, near-term challenges warrant a cautious approach.

Given the current Mojo Grade of Sell and the modest improvement in financial trend, a wait-and-watch stance may be prudent until clearer signs of recovery emerge. Diversification within the auto components sector and exploration of alternative investment opportunities could also be advisable.

Summary

Exide Industries Ltd’s Q3 2025 results reflect a stabilisation in financial performance after a period of decline, with a flat revenue growth trend and persistent margin pressures. The company’s low ROCE and underperformance relative to the Sensex highlight ongoing operational challenges. While the upgrade from Strong Sell to Sell indicates some improvement in market sentiment, investors should remain vigilant and assess the company’s ability to execute strategic initiatives that can drive sustainable growth.

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