Recharge your portfolio with the best EV battery stocks in 2024

Exide Industries, a leading manufacturer and distributor of lead-acid batteries and storage solutions, is also expanding its capabilities on Li-Ion batteries (Photo: Mint)
Exide Industries, a leading manufacturer and distributor of lead-acid batteries and storage solutions, is also expanding its capabilities on Li-Ion batteries (Photo: Mint)


  • Batteries lie at the heart of the shift from fossil fuels to clean and emissions-free energy. Here are five companies that could drive this transformation.

Demand for electric vehicles (EVs) in India is gaining momentum. According to the government’s Vahan dashboard, 1.4 million million EVs have been registered so far this calendar year – 37% more than in 2022.

This surge is attributed to the government's push for lowering emission to achieve its net-zero target, and has proved a catalyst for EV batteries.

Source: Vahan dashboard
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Source: Vahan dashboard

In November 2021, India announced its target of net-zero carbon emissions by 2070. Climate change is not a new phenomenon, but many countries are now seeing its effects. India faces extreme weather events such as heat waves, floods and droughts, and serious issues such as declining groundwater reserves. These issues are affecting people’s health and India’s gross domestic product (GDP).

The recent drop in air quality in prominent cities such as Delhi and Mumbai has also nudged the government to take steps to mitigate climate change. At the recent G20 Summit, all member countries showed their commitment to triple global renewable energy capacity by 2030.

India to embrace the growth in the EV market

Government initiatives such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme are a step towards widespread adoption of EVs in India. The government also offers tax benefits to buyers of hybrid and electric vehicles.

A  report by Mordor Intelligence said India’s EV market in India is estimated to be worth $37.7 billion by 2028. This translates to a compounded annual growth rate (CAGR) of 46.4% from 2023 to 2028.

According to reports, the second phase of FAME has already allocated 100 billion for customer incentives. Meanwhile, a production-linked incentive (PLI) scheme allocated 260 billion to the automotive industry for sourcing and producing vehicles locally. These efforts are indeed helping India become the world’s primary hub for EV production.

Around 70% of Indian car owners in tier-1 cities would prefer an electric car as their next vehicle, which is higher than the global average of 52%, according to McKinsey & Company.

Increasing demand for EV batteries

Batteries lie at the heart of the shift from fossil fuels to clean and emissions-free energy.

Over the past decade, lithium-ion batteries have been used in EVs, but the huge rise in EV demand has affected their supply chain. There are only a few lithium-ion manufacturing facilities in India, and this opportunity is likely to boost the Indian battery market.

According to Mordor Intelligence’s report, India’s battery market is expected to be worth $16.8 billion by the end of 2023 and $27.7 billion by 2028. This translates to a CAGR of 10.6% over five years.

It thus makes sense to take a look at India’s top EV battery companies, which could do well as demand for EVs shoots up.

Here are the top EV battery makers to look out for in 2024.

1. Amara Raja Energy & Mobility

Amara Raja Energy & Mobility is one India’s largest manufacturers of lead-acid batteries for both industrial and automotive applications.

It also exports to over 50 countries and is looking to expand to even more. The company’s flagship brands Amaron and PowerZone have strong recall in the domestic market. It has seven manufacturing facilities in Andhra Pradesh, four of which have been awarded gold at recent international-level quality circle competitions (ICQCC) in Jakarta.

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As of 6 December, the company’s stock is near its two-year high of 770.

Automobiles contribute about 68%, industrial 30%, and others about 2% of its revenue. The company has consistently recorded better earnings before interest, tax, depreciation, and amortisation (Ebitda) margins than its listed peers.

Its average Ebitda margin over the past 10 years is about 15%, while the average of peers is about 13%.

The company recently signed a memorandum of understanding with the Telangana government to set up a lithium-ion battery ‘gigafactory’ there. It will have a cell manufacturing capacity of up to 16 gigawatt hours (GWh) and an assembly capacity of up to 5 GWh. The company is planning to invest around 95 billion in it over the next 10 years.

The first phase involves setting up a 2 GwH-capacity Li-ion cell plant with a capex outlay of about 12 billion. This is likely to be operational in the next two to three years.

2. Exide Industries

Exide Industries is one of the leading manufacturers and distributors of lead-acid batteries and storage solutions and is strengthening its market share across the automotive and industrial sectors. It is also expanding its capabilities on Li-Ion batteries.

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Exide Industries’s stock fell to a low of 136 in mid-June 2022. It’s currently trading at 291. This stock has delivered a return of 54.8% in the past year.

The company’s core segment has seen solid growth over the past two years thanks to increasing demand.

The battery segment is witnessing a big technological shift, and the company is committed to investing 60 billion, in phases, in a 12 GWh Li-Ion cell plant to handle future demand from EV the segment.

The company is likely to benefit from the automotive segment if it:

  • Is a leader in the growing OEM and aftermarket segment.
  • Launches new and advanced products for new applications.
  • Expands its network in the Indian aftermarket and export markets.

The industrial segment will benefit if:

  • Demand picks up, primarily driven by government and private capex.
  • The company continues increasing its investments in renewable energy.

Thanks to double-digit growth across segments, with the industrial segment outperforming, the company clocked revenue growth of 17.6% year-on-year in FY23. However, margins were affected in FY23 thanks to high commodity prices.

3. Kabra Extrusion Technik Ltd

Kabra Extrusion Technik is one of India's premier manufacturers and exporters of plastic extrusion plants. It is a leader in the extrusion market, with a presence in more than 100 countries.

Battrixx, its future technologies division, has developed a flagship product around advanced Li-Ion battery packs and modules for EVs.

The extrusion segment contributed 47% of the company’s revenue as of the first half of FY24, while Battrixx contributed 52%.

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After hitting an all-time high of 621.85 in mid-February, the stock fell around 33%. It is trading at 419.20 as of 6 December. It has shed about 16% in the past three months.

This fall is due to a contraction in the company’s Ebitda and profit after tax (PAT) margins. In the first half of FY24, the Ebitda margin contracted 15.9% year-on-year, while the PAT margin contracted 16.4%. This fall was primarily due to higher operating and finance costs. Revenue, however, jumped 10.8% YoY to 3,160 million.

The extrusion machinery segment was the main contributor to this jump as its revenue surged 18.3% YoY to 1,516 million. Battrixx’s revenues grew just by 5.7% YoY to 1,680 million.

However, the company expects demand to recover because of the festive season and new launches.

The EV battery segment is expected to grow to $27.7 billion in the next five years, and the company could participate in this growth story. However, it needs to ensure it has the right product mix and contain its operational and finance costs.

4. Neogen Chemicals Ltd

Neogen Chemicals, which has been operating since 1991, is one of the leading manufacturers of bromine- and lithium-based speciality chemicals.

It has been the largest importer of lithium carbonate and lithium hydroxide for the past three decades and thus has strong relationships with leading lithium miners and processors around the world.

Although the company does not manufacture EV batteries itself, it is one of the leading raw-material suppliers of battery chemicals.

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Its stock jumped from 263.55 in May 2019 to 1,516.55 on 6 December 2023, clocking a CAGR of 47.5% in four-and-a-half years.

Since hitting an all-time high of 1,907 in January 2022, the stock has struggled to surpass this level. It is currently trading near its September 2022 highs.

The company said during a recent earnings call that it plans to set up an electrolyte plant with a capacity of 30,000 kilo tonnes per annum (KTPA), up from its previous target of 10,000 KTPA. It will also set up lithium-salt units with a capacity of 4,000 tonnes per annum (TPA), up from 1,000 TPA.

The company is certain it will start getting orders from three to four battery manufacturers in 2024.

It said one of its international customers was waiting for its production line to stabilise before sending orders.

5. HBL Power Systems Ltd

HBL Power Systems, incorporated in 1983, manufactures and services various types of batteries, EVs, and other products.

Its strategy is to identify and plug technology gaps in India. The company focuses on creating technology solutions for challenging applications in sectors such as telecom, UPS, railways, power, oil & gas, industries, and defence.

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The company has seen robust growth in the past five years. Its stock jumped from 25.75 in December 2018 to 390.65 on 6 December 2023. This translates to a CAGR of 83% over five years.

This stock’s rise is supported by the company’s strong financials. Over the past five years, its PAT has grown at a CAGR of 29.6%, versus the industry average of 4.8%.In the second quarter of FY24, net profit jumped 2.5 times year-on-year.

India imports not just Li-ion cells, but also motors and controllers for most EVs that are manufactured domestically.

The company has been investing in in-house development of parts for motors and controllers since 2017. It plans to test these products on highways in 2024. It also plans to convert old diesel highway trucks to electric using its motors and batteries. Though there are a large number of old trucks, the company’s solution will work for only a few of them.

The management has said that there’s huge scope in this space. At present, the company has no competitors as there is no subsidy for electric trucks.

Top EV battery stocks on Equitymaster’s stock screener

Here’s a list of top EV battery stocks on Equitymaster’s stock screener. These parameters can be changed according to your criteria.

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Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

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