Market Size Battery Industry in India is more than Rs. 20,000 Cr. Amara Raja Batteries, Exide Industries, Panasonic Energy, Indo-National have good market share in this industry in India. In this industry, 60%-65% of the market share is of the organized players and the rest 35%-40% is of the unorganized players.
Earlier, there was a difference of 30% in the prices of batteries between organized and unorganized players. But post GST, this difference has come down to 10%-15%. After the implementation of GST, the unorganized players faced a lot of problems.
The opportunities for the battery industry, specifically to the organized players like are the Electronic Vehicles (EV). E-vehicles are the next big thing. This opportunity will open up in the next decade, that is by 2022. The OEM’s have planned on shifting to e-vehicles as soon as possible. Mostly all the companies have started working towards it with the R&D procedure being run with full speed. Many major companies have the timeline to start the rollout of the e-vehicles by 2022.Thus, this new e-vehicles market looks like a major opportunity which can be grabbed by these 2 companies.
NEW HORIZON AHEAD (E-Vehicle Market)
The companies have started their preparations for this market. These companies too have R&D running at great speeds to benefit from this market.
For this, Exide Industries has found a foreign partner to help them out. Amara Raja Batteries already has foreign partner. Johnson Controls hold 26% stake in the company. Johnson Controls have the uniqueness to provide technology support and gain stake in the company.
Road Ahead
These companies majorly have lead based batteries, which are also the main products of the companies. And in the last 3 years the prices of lead have increased significantly. As a result of this, the Net profit margins of these companies have gone down.
Auto sector has seen downturn in the recent times. This has directly impacted the auto-ancillary companies, battery companies included. But the auto sector will reach a consolidation in the next couple of quarters after which it may experience a revival. The cycle of the auto sector will take turn toward the positive side & E Vehicles could be the game changer for these companies.
BENEFICIARIES : AMARA RAJA, EVERADY, PANASONIC ENERGY, INDO NATIONAL.
