India’s top EV battery makers gear up for higher returns

I discussed the triggers of the EV battery congestion in India and provided a snapshot of this space.

However, since then the enthusiasm in the sector has quadrupled.

Companies living in areas away from the auto industry also plan to enter the EV battery sector.

So, what are India’s leading EV battery makers doing in the meantime?

let’s find out.

#1 Amara Raja Batteries

Amara Raja Batteries announced that it plans to invest US$1 billion in capital expenditure over the next five to seven years.

The company said it will use the investment for a massive 10-12 gigawatt (gigawatt-hour) lithium-ion battery facility under the government’s Advanced Chemistry Cell (ACC), PLI (Production Linked Incentives) scheme.

It is also in talks with the Tamil Nadu government to set up a battery manufacturing unit in the state as part of its expansion plans.

The move comes amid a crisis in his home state of Andhra Pradesh where the company and the government are locked in a legal battle in the High Court.

In its latest quarterly results, the company’s net profit nearly doubled ₹1.2 billion for the June 2021 quarter. Net profit margin also increased marginally to 6.6%.

However, the company’s shares remained almost flat last year. The stock is down 18.3% in 2021.

#2 Exide Industries

Exide Industries said it plans to set up a Tesla-style Giga factory for lithium-ion batteries in the near future using the government’s production-linked incentive (PLI) scheme.

The company will finalize the details of its cell battery manufacturing facility once the segment-related PLI is announced.

Exide is also planning to start its lithium-ion battery assembly factory in Gujarat by the end of the financial year 2022. It had delayed plans to bring the facility on-stream due to the pandemic.

The company already has tie-ups with around 100 OEMs (Original Equipment Manufacturers) and is conducting trials for various prototypes.

Exide posted a consolidated net profit of ₹320m for the June 2021 quarter. The company had reported a consolidated net loss of ₹In the same period last year, 140 m.

The company’s shares are up 9.3% in the last one year. However, the stock is down 5.8% in 2021.

#3 Tata Group – Tata Power/Tata Chemicals

Tata Power has partnered with Macrotech Developers (Lodha) to provide end-to-end EV charging stations across all its residential and commercial projects in Mumbai and Pune.

Under this partnership, Tata Power will set up EV charging stations in the Lodha development. The charger will be available to all residents and visitors who are EV owners.

Meanwhile, Tata Chemicals has launched a lithium-ion battery recycling initiative as part of its commitment to sustainability.

The company aims to recycle 500 tons of used Li-ion batteries to recover valuable metals such as lithium, cobalt, nickel and manganese.

In its latest quarterly results, the company has reported a manifold jump in consolidated net profit ₹3.4 billion for the June 2021 quarter.

The company’s stock is up over 200% in the last year, while in 2021, it is up over 90%.

#4 Hero MotoCorp

Hero MotoCorp said it plans to launch its first battery-powered two-wheeler in March 2022. The electric scooter is developed independently by Hero.

Hero MotoCorp Chairman and CEO, Dr Pawan Munjal teased the pre-production prototype of the upcoming electric scooter during the company’s tenth anniversary celebrations.

The company also said that it plans to launch a second electric scooter by the second half of next year. It will develop it with the help of Taiwan-based electric vehicle maker Gogoro.

The two brands had announced a partnership earlier this year that would include the use of battery swapping technology in the upcoming electric two-wheelers.

Hero MotoCorp reports a year-on-year (YoY) growth of 498% in net profit ₹3.7 billion for the June 2021 quarter.

Although the company’s shares have fallen 8.4% last year and 7% in 2021.

#5 Maruti Suzuki

Maruti Suzuki announced that it is developing a hybrid electric vehicle (HEV) with Toyota.

The company said that the technology has great merit as it can scale up without dependency on external charging infrastructure and also provides good reduction in emissions.

In a press release, Maruti Suzuki said,

Some electric vehicles have a joint test program; Testing of these prototypes will begin with Toyota next month. We are planning to get more consumer feedback on usage patterns etc.

Till the time charging infrastructure is developed in India, you will need self-charging machines, so we will use hybrid electric vehicles.

In self-charging cars, an internal combustion engine (ICE) provides energy to the battery in addition to wheel rotation.

Since the battery powers the car, such a vehicle gives more mileage than a pure ICE car.

Maruti Suzuki India reported a net profit of ₹4.4 billion for the June 2021 quarter as against a net loss of ₹2.5 billion in the year-ago quarter.

The company’s shares have gained only 9.5% last year as against a 56% rise in the BSE Sensex.

How can you ride the EV trend?

Electric vehicles are the hottest story in the market today.

There is a huge wealth to be built in this place. But to play it right, you need to find the best EV stock to buy.

Tanushree Banerjee, co-head of research, Equitymaster, believes that the real wealth in electric vehicles is far from the passenger car makers.

To know where the real opportunity lies, you can check out his article in one of the recent editions of Profit Hunter: real money in electric vehicles.

you can also join him India Revival Group on Telegram To get the latest updates.

(This article is syndicated from) equitymaster.com)