Top Battery Companies in India: Why Invest in Them?

Top Battery Companies in India: Overview

The country is waiting to see a revolutionary change in the investment business ever since the year 2022 started. This year has not yet marked any significant impact in the market, well at least not positive. In the midst of the promulgations and anticipation, the real-time investors are anxious about what the coming period has to offer.

While certainly, the growth opportunities are appearing to be timid now, one industry might be able to thrive in this downward market in the upcoming years i.e. the battery market in India. With the introduction of government initiatives and EV vehicles likely to take on the market, it shall be interesting for you to find out what this article has in store about the battery stocks in India. 

Overview of Battery Industry In India

In the present scenario, the Indian battery market is segmented as under:

• Technology (Lithium-ion Battery, Lead-acid Battery, etc.)
• Application (SLI Batteries, Industrial Batteries, Stationary (Telecom, UPS, Energy Storage Systems (ESS), etc.) 
• Portability (Consumer Electronics, etc.)
• Automotive Batteries (HEV, PHEV, and EV), and Other Applications).

Top Battery Companies to Invest in India

The Indian battery market is highly fragmented. Here the major market players include Exide Industries Ltd, HBL Power Systems Ltd,  Luminous Power Technologies Pvt. Ltd, TATA AutoComp GY Batteries Pvt. Ltd, and Okaya Power Pvt. Ltd.

Let us find out the top battery companies and their market potential so as to give you a brief idea of which stocks should be probable options to fit in your portfolio so to give you the best returns:

(Data as of 23rd Feb 2023)

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

Top Battery Companies in India: Overview

The country is waiting to see a revolutionary change in the investment business ever since the year 2022 started. This year has not yet marked any significant impact in the market, well at least not positive. In the midst of the promulgations and anticipation, the real-time investors are anxious about what the coming period has to offer.

While certainly, the growth opportunities are appearing to be timid now, one industry might be able to thrive in this downward market in the upcoming years i.e. the battery market in India. With the introduction of government initiatives and EV vehicles likely to take on the market, it shall be interesting for you to find out what this article has in store about the battery stocks in India. 

Overview of Battery Industry In India

In the present scenario, the Indian battery market is segmented as under:

• Technology (Lithium-ion Battery, Lead-acid Battery, etc.)
• Application (SLI Batteries, Industrial Batteries, Stationary (Telecom, UPS, Energy Storage Systems (ESS), etc.) 
• Portability (Consumer Electronics, etc.)
• Automotive Batteries (HEV, PHEV, and EV), and Other Applications).

As per the reports, the battery market in India is about to see a growth at a CAGR of more than 15% by 2030. This indicates a positive outlook on the industry. Well, for the industry this is a major highlight, specifically after the negative anticipation that was created due to the outbreak of COVID-19 in 2020. The pandemic almost shattered the growth of the battery market in the country. But thanks to the emergence of innovative and exciting ideas that have now created an appealing market in India such as electric vehicles and battery energy storage systems for different applications. These have changed the ballgame of the industry and are expected to act as economic drivers for the battery market in India.

The industry however is yet to curb the challenges that it has faced due to the lockdown measures that were imposed by the government to stop the spread of Covid-19. This had majorly impacted the shipping routes for the manufacturing units of lithium-ion as well as lead-acid batteries in the nation. Also, the absence of the lithium-ion domestic manufacturing vicinity is acting as a major hurdle restraining the market. 

Nevertheless, it cannot be denied the market potential is huge and yet to be explored while the automotive segment is likely to witness a splurging growth in the Indian battery market ever since the country has been leaning towards the adoption of electric vehicles.

Let us find out what the industry has in store for its investors.

Top Battery Companies in India: Why Invest in Them?

We can gather that the battery market in India must be on a watchlist to explore for a long-term investor. To support the statement further, one must look at the published NITI Ayog report that mentions how the country has a budding prospect for large-scale battery manufacturing industries. It also claims that India may surpass Rs 1.12 trillion and is likely to experience a volcanic scheme of demand between 2050-2030.

On top of these numbers, another reason why an investor may watch out for the battery promulgation is the government's interest in the industry. The government has been taking various initiatives to boost the manufacturing of batteries in India. One such step is launching Production-linked Incentive i.e. PLI program in India. The department of Heavy Industries has already allotted about Rs. 181 billion to the industry for the 5-year payout and has been contemplating on various measures to create an in-house supply in the nation. This is likely to create a huge market and hence can create an alive market for the investors to invest in battery companies in India.

Why Lithium-ion-battery Stocks are the Future in India?

• It is a known fact that with electric vehicles (EVs) accounting for about 90% of the overall battery market, lithium-ion stocks are the most exquisite type to consider for investment in the industry. 
• India’s annual lithium-ion battery market is expected to grow to 116 GWh in FY 2029-30. The figures are backed by the reports of JMK Research as well as IEEFA (The Institute for Energy Economics and Financial Analysis).
• This report also estimates that the annual lithium-ion battery demand that can be generated by automotive applications is likely to increase to 104 GWh by FY2029-30. The reason for this likely potential is the favorable government policies that include the Faster Adoption and Manufacturing of Hybrid & EV i.e. FAME and various other state-level EV policies. 
• Also, the demand for lithium batteries in the non-automotive capacitive is forecasted to increase to around 12 GWh which shall be driven by the telecom towers and grid-scale renewable energy (RE) integration, data centers, and rooftop solar.
• Another report suggests that the government of India has targeted about 30% of new electric vehicle sales by 2030 and about 34 GW/136 GWh of battery storage that shall be needed to add about 450GW of renewables in India by the end of that period. As estimated by the Central Electricity Authority (CEA), this figure shall further drive the nation to adopt key lithium battery consumers.
• Since battery packs have been assembled in the country for years now. lithium cell manufacturing on a commercial scale may be on to a good start. As a result, the nation may meet its cell requirements.
• One interesting thing to note is that the plans for in-house manufacturing of lithium-ion batteries in the country might bring down the EV cost in due time and this shall reduce the dependency as well as the troubling import duties. Thus creating an opportunity for the lithium-ion battery market in India soon.

Suggestions for Investors to Invest in Battery Stocks:

• Do extensive research before investing in a battery company in India. Check out the financial growth potential of the companies instead of backing your investment on historic data.
• Look out for market leaders. Given that India is still in the developing phase in terms of the battery, the current market leaders could prove to be worthy investments. These may generate substantial returns if you are thinking 10 years down the line.
• Check on government initiatives. These are likely to drive the demand-supply of the market in India. The battery companies have been receiving huge support from the government of the nation for in-house manufacturing and some of them are in line to receive subsidies from the government, watch out for those companies’
• Check for foreign investments. This is another driving force for the industry, follow-up on their mergers and investment plans that have been lined up currently with the home companies. This shall provide you with an in-depth idea of where to bag your money in the industry.

With the world opting to become a green economy and with electric vehicles coming into the picture, the battery industry is likely to be bombarded with a series of opportunities. In this light, an investor can earn the maximum return out of this industry in the coming years. However, since a lot is at stake when we analyze the ramifications that may arise given its complicated manufacturing requirements, it is advised to invest with caution and apply sincere due diligence before making a viable investment decision.

Important things to remember:

1. Do Not Blindly Follow Hot Tips

No matter how credible the source is, never follow a stock marketing tip blindly without conducting thorough research personally. Always select the stocks after doing proper research and analysis on the performance as well as the companies. While some tips can work out to give you huge benefits, the wrong ones can push you down under the risk pretty quickly. 

2. Eliminate Loser Stocks from Portfolio 

There is absolutely no guarantee that a stock will rise after a great fall. Know that it is extremely important to be practical about what is possible and what's impossible in the stock market. So, upon realizing that a stock is performing poorly in your portfolio, accept your mistake and sell it immediately to prevent further losses. 

3. Don't Exceed Your Investment Budget Abruptly 

While it's true that long-term investments are way better than other forms of investment, you shouldn't exceed your investment budget in a haste. Instead, decide on a fixed amount and invest it across various good stocks. Rather than investing in only one stock, divide your budget evenly across multiple good-performing stocks and shares. 

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns