EXIDE estimates a Lithium-Ion battery manufacturing facility requires a capex of approximately US$250m

Exide Pakistan Ltd. held its analyst briefing today to discuss MY24 results and its future outlook. The following are the key highlights:

In MY24, the company posted a topline of PkR26bn vs. PkR23bn in MY23, an increase of 10% year over year.
Gross margins for MY24 reached 19%, up from 14% in MY23. However, future margins may be influenced by competitive pressures. The company has no plans to engage in unhealthy competition with informal manufacturers.
The company posted earnings of PkR1.2bn (EPS: PkR161.49) in MY24 vs. PkR755mn (EPS: 97.12) in SPLY.
Management stated that sales in the auto sector remain less than 5% of the total volumes. Furthermore, management expects demand to increase in the solar segment, for which the company is prepared.
As per management, Lithium-Ion batteries are expected to be utilized in solar systems.
Currently, the company is sourcing Lithium-Ion batteries from China as complete-built units (CBU). There are no plans to manufacture these batteries in Pakistan, as demand appears limited due to their long lifespan of 10 years.
Moreover, management stated establishing a Lithium-Ion battery manufacturing facility is estimated to require a capex of approximately US$250mn (PkR69.5bn). Additionally, the manufacturing process for lithium-ion batteries is intricate and challenging.

Courtesy – AKD Research