Amara Raja: Will the electric vehicle ready Indian market penalize Exide shares and Amara Raja for being old school?

Kankana Roy Choudary and Mohab Al Haq concept

summary

A few years ago, both Amara Raja and Exide were fund managers’ favorite stocks. However, over the past five years, Nifty Auto has returned nearly 23%, while Amara Raja and Exide are down 32% and 3%, respectively. The reason: Lithium-ion batteries are replacing traditional lead batteries in electric vehicles. Investors are concerned if these companies will be able to adapt.

When the cyclical auto sector was in a recession before Covid-19, Amara Raja batteries and Exide Industries were also facing the heat. Their share price crashed. However, despite the recovery in the sector – the Nifty Automotive Index has posted returns for almost a year on par with the Nifty 50 – Amara Raja and Exide are falling further each day. Even mutual funds (MFs) that previously had high stakes in these companies have reduced their holdings

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