PACRA Maintains the Entity Rating of Exide Pakistan Limited

EXIDE Pakistan Limited (“EXIDE” or “the Company”) is a pioneer in the battery industry in Pakistan. Since its inception in 1953, the Company has maintained a strong presence across the automotive, industrial, and household backup segments through a diversified product portfolio and longstanding market reputation. Demand for the local lead-acid battery sector primarily stems from the replacement market, household backup needs arising from electricity shortages, and sales to Automobile Original Equipment Manufacturers (OEMs). In recent periods, the battery industry has experienced renewed traction, supported by improved automobile offtake as the macroeconomic environment stabilizes. A more stable exchange rate, easing inflation, and a relatively favorable interest rate outlook have contributed to increased vehicle demand, generating broader room for growth in OEM-related battery sales. Concurrently, rising household and industrial energy consumption, along with recurring load-shedding, has reinforced the need for efficient backup power solutions. Persistently high electricity tariffs have also accelerated the shift toward solar power systems, where batteries serve as an essential storage component, significantly expanding the industry’s demand base. Additionally, the sector is witnessing a technological shift as consumers increasingly transition from conventional lead-acid batteries to lithium-ion solutions, driven by longer life cycles, superior efficiency, and compatibility with modern solar infrastructure. While these factors collectively support a positive growth in industry. However, the sector continues to face some challenges in the form of intensified competition, limiting pricing flexibility, and substantial installed capacities relative to existing demand, creating pressure on industry-wide profitability. During FY25 (March-25), the revenue of the Company recorded a slight decline of ~7%, mainly due to downwards prices adjustments caused by prevailing local market dynamics, however volumes posted a positive growth of ~16%. Profitability margins remained under pressure, with the gross profit margin at ~16.2% (Mar’24: ~18.9%) and net margin at ~2.6% (Mar’24: ~4.9%), reflecting heightened competition and constrained ability to fully pass on cost escalations. During the period under review EXIDE maintained its market share of ~16%. Going forward, the Company remains committed to product modernization and diversification. It has introduced maintenance-free and tubular batteries and is currently importing lithium-ion units, with plans to localize production as market demand strengthens. EXIDE is also expanding its offerings in integrated solar solutions and exploring opportunities in the chemicals segment. The Company’s financial risk profile remains adequate, supported by manageable working capital requirements, satisfactory cash flows, and comfortable coverage metrics. The capital structure is moderately leveraged, with short-term borrowings dominating the debt mix, a trend expected to continue in the absence of major CAPEX plans in the near term.
Ratings are dependent on the sustainability of the growth trajectory in the topline and profitability matrix while retaining sufficient cash flows, coverages, and market share along with improvement in the sales volumes. However, adherence to maintaining its debt metrics at an adequate level is a prerequisite.

About the Entity
EXIDE was incorporated in Pakistan in 1953 as a private limited company in association with Chloride Group PLC of the United Kingdom and was listed on the Karachi Stock Exchange in 1982. EXIDE's majority stake is held by the Hashwani Family (75.54%) while the financial institutions and mutual funds hold ~16.24% and the remaining ~8.22% is held by the general public. Mr. Arif Hashwani is the Chairman of the Board while Mr. Arshad Shahzada is the Managing Director/CEO of the Company.