Fresh lithium pack order to add Rs 500 crore more to Exide's turnover in next 12 months
The Kolkata-based company has received orders of Rs 600 crore to Rs 700 crore for its lithium-ion modules and packs to be executed in the next 12 to 15 months.
Exide Industries, India's largest battery player, hopes to add Rs 500 crore in net sales over the next 1.5 years from the new orders for its lithium-ion modules and packs, a senior executive said. The Kolkata-based company has received orders worth Rs 600 crore to Rs 700 crore for its lithium-ion modules and packs to be executed in the next 12 to 15 months for various verticals such as two-wheelers, three-wheelers, commercial vehicles, and telecom.
According to Subir Chakraborty, MD and CEO of Exide, the new lithium-ion battery domain will be a part of the company's wholly-owned subsidiary, Exide Energy Solutions (EESL).
"The module and pack-making facility has received orders of Rs 600 crore to Rs 700 crore, however, the cells are imported. But ultimately, these cells will be produced in our own factory in Bengaluru, for which construction has already started. We are certainly looking at Rs 400 crore-Rs 500 crore of additional turnover from this business over the next 12-15 months," he said.
For the lithium project, the company has invested Rs 715 crore to date, on equipment and the appointment of top management for the gigafactory. “On ground, construction activity has been initiated, and foundation-linked work is progressing in full swing. We have recruited a senior management team comprising experienced and senior personnel in functions such as R&D, sales, procurement, quality, IT, and others. This team is expected to ensure timely project execution and delivery,” Chakraborty added.
The net income of Exide Industries stood at Rs 15,203 crore in FY23, up by 18.30 percent YoY from Rs 12,851 crore recorded in FY22. During the full financial year 2023, the company’s net profit stood at Rs 822.7 crore down by 81.16 percent YoY from Rs 4,367 crore recorded in FY22.
Shedding light on the battery pack or module manufacturing process, Chakraborty pointed out that currently India is lacking in 70 percent of the value chain of the EV battery ecosystem, which is cell manufacturing, and only 30 percent lies with packs or modules.
"At the moment, when we are importing the cells, we are missing out on 70 percent of that value chain; once our own plant starts up, we will benefit from it,” he added.
On the capex front, the company management plans to spend Rs 500- Rs 600 crore on lead acid battery business per annum and Rs 4,000 crore on lithium-ion by FY25. Exact cash outflow may vary for the new plant depending on the execution. The company's management also guided that the EBITDA margin in lithium-ion will be equivalent to Exide’s lead-acid battery business, as bulk sourcing of the raw materials will be done from its tech partner SVOLT on its behalf, which is a key cost advantage for the project.
In December 2021, Exide entered into a technical collaboration with the Jiangsu-headquartered high-tech lithium-ion producing company SVOLT. Under this agreement, SVOLT will grant Exide an irrevocable right and license to use, exploit, and commercialise the necessary technology and know-how owned by it for lithium-ion cell manufacturing in India.
The company assured that progress on setting up of a greenfield lithium-ion gigafactory project is on track. The first phase is expected to commence production by the second half of FY25. The plant would have an initial annual production capacity of 6 gigawatt hours (GWh) with a target to reach 12 GWh in 8-10 years. Currently, the battery giant is running homologation projects for an electric two-wheeler, three-wheeler, and commercial vehicle lithium-ion batteries and expects about a 20 percent RoIC (Return on invested capital) from this business at optimum utilisation level.
Further, the company has also applied to NCLT for the merger of Exide Energy Solutions (cell manufacturing plant) and Exide Exergy (battery assembly plant).
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