Exide Industries Ltd

Dear Shareholders,

It is with great pleasure that I present the inaugural Integrated Annual Report of our company. This report represents our initiatives on environmental, social, and governance (ESG) parameters and outlines our future aspirations in sustainability. Furthermore, it showcases our comprehensive performance across all business operations for the current financial year.

The past few years have been marked by significant fluctuations in both global and domestic markets. At Exide, we perceive these shifts as growth opportunities. Leveraging our extensive product portfolio, robust innovation capabilities, and customer-centric approach, we have adeptly navigated market volatility and have emerged stronger.

Economic overview: India shining despite global uncertainties

The global economy has encountered multiple disruptive events over the past few years, leading to supply chain disturbances, surge in commodity prices, increased inflationary pressures, and rising interest rates. The calendar year (CY) 2023 also started with these challenges resulting in lower global growth expectations. However, situation improved in the second half of the year with an improving demand scenario in many economies. The International Monetary Fund (IMF) estimates that the global economy growth rate will be 3.2% in CY 2023, compared with 3.5% in CY 2022.

As we enter CY 2024 inflationary pressures are easing, and central governments are modifying their monetary policies to balance inflation and growth. Global demand is expected to remain stable, supported by an increase in consumption and investment.

India has distinguished itself as the fastest-growing economy with an estimated growth rate of 7.6% for FY 2023-24. This growth is driven by resilient domestic demand and the Reserve Bank of India's effective monetary policies, emphasising India's robust economic position. The outlook remains optimistic and India continues to strengthen its position through prudent fiscal policies and agile governmental interventions, underscoring itself as one of the fastest-growing economies.

Exide: Yet another year of strong performance

Demand for energy and energy storage solutions is growing at an accelerated pace in India. While automotive vertical benefits from growing income levels and rising urbanisation, increasing business activity and higher capex augurs well for the industrial verticals in which we operate. Exide with its diversified product portfolio and pan-India reach, is catering to the growing demand in both the divisions.

Exide experienced an outstanding year in FY 2023-24, with sales surpassing H 16,000 crores and EBITDA exceeding H 1,800 crores. Our company continues to maintain its status of a a debt-free entity. The Board has proposed a dividend of H 2.00 per share, representing a 200% dividend payout ratio (subject to shareholders approval in the Annual General Meeting).

Advancing in the lithium-ion sector

Exide has always been at the forefront of adopting new technologies, based on the evolving market requirements. Recognising the escalating demand for lithium-ion batteries and energy storage solutions in India, we started preparing ourselves for new opportunity long ago. Nearly six years back, Exide forayed into this space by setting a lithium-ion pack and module making facility in Prantij (Gujarat). Through this venture, we gained deep understanding of the lithium-ion technology including advantages and risks in different climatic conditions.

In 2022, we also started setting-up a green-field lithium-ion cell manufacturing plant with a total capacity of 12GWh, planned to be set up in two phases of 6 GWh each. Phase-1 of the project is expected to be completed by the end of Financial Year 2024-25. With the completion of the project, we will be one of the leading players in the lithium-ion cell manufacturing space in India.

Making significant progress in sustainability

Sustainability has seen tremendous focus across the globe and businesses are embracing environmental and social responsibilities to meet growing expectations. Stakeholders are demanding businesses to communicate about their environmental practices, social initiatives, and governance structures. Adherence to these expectations leads to greater accountability and encourages the integration of sustainability into business strategies.

At Exide, sustainability remains a core focus and we have been adopting sustainable practices long before it became an increasing expectation

Exide focuses on investing in employee training and development, and we have provided more than 2.75 lakh manhours of training to our employees and workers in the current financial year.

from stakeholders. We derive nearly one-fifth of our energy consumption from renewable sources and are committed to increasing this share. Our lead smelting facility, operated through our wholly owned subsidiary Chloride Metals Limited (CML), plays an important role in promoting circular economy. We source nearly 45% of lead and lead alloys requirements from our subsidiary.

Exide focuses on investing in employee training and development, and we have provided more than 2.75 lakh manhours of training to our employees and workers in the current financial year. Our corporate social responsibility is built on five pillars of employability, education, health, environment, and empowerment. In FY 2023-24, nearly 3.1 lakh people benefited through our CSR initiatives and close to 80% of the people were from the marginal and vulnerable sections of the society.

We maintain strong corporate governance by adhering to all regulatory requirements in a timely manner and by working towards the best interest of stakeholders and society. We are governed by highest standards of transparency and accountability in our operations, thereby protecting the long-term value of the company. We have implemented an effective risk management system that helps identify internal and external risks and enables us to take proactive actions to mitigate them in a timely manner.

Optimistically moving into the future

With positive macroeconomic dynamics, we foresee promising prospects for our lead-acid battery business. Additionally, India's shift towards greener mobility will propel the demand for EVs, thereby creating a positive demand for the lithium-ion business. For us, the upcoming year and beyond are of immense importance as we leverage the groundwork laid in the past few years to achieve a performance that instills pride and confidence. These forthcoming years signify a notable transition towards a technologically advanced future, demanding swiftness and agility. I have the utmost confidence that the dedication and commitment of our teams will facilitate this transition.

In conclusion, I extend my heartfelt gratitude to our stakeholders, including our dedicated workforce, visionary leadership team, customers, and shareholders, for their unwavering support. Together, we are poised to write another illustrious chapter in Exide's journey of sustainable growth.