Auto Ancillary Stock Hits 52-Week High, Board Recommends Dividend, Gets Buy Rating For 25% Gains

Leading broking firm IDBI Capital in its Technical pick has picked Exide Industries Ltd. with a "Buy" recommendation. The brokerage sees a 25% potential upside in the share price of the company considering the given target price of Rs. 256/share.

On 8th May 2023, Board recommended a final dividend of Rs. 2 per equity share of face value of Re. 1 each fully paid up for the financial year 2022-23. The recommended dividend is subject to the approval of shareholders of the company at the 76th AGM scheduled on 8th August 2023.

Exide Industries is an Auto Ancillary sector midcap company with a market capitalisation of Rs. 17,488.75 crore.

Recommends Dividend

According to the regulatory filing by the Board of Directors of the Company, "The Board of Directors, at its meeting held today, has recommended a final dividend of Rs. 2.00 per equity share of face value of Re. 1/- each fully paid up (i.e. 200%) for the financial year ended 3151 March 2023, subject to the approval of the shareholders at the ensuing 76th Annual General Meeting ("AGM") of the Company."

The 76th Annual General Meeting of the Company will be held on Tuesday, 8th August 2023, according to the exchange filing.

Buy for a target price of Rs. 256/share

According to IDBI Capital, Exide Industries Ltd. is primarily engaged in the manufacturing of storage batteries and allied products in India. Storage Batteries Segment (74% of revenues): The company is the leading storage battery manufacturer in India, with leaders in almost all categories in the automotive, industrial, and submarine sectors. On the monthly chart, the stock prices have formed a base formation at 125-130 levels and are on the verge of breaking a "W" bullish pattern; however, in the past few months, stocks have consolidated sideways and are currently triggering a fresh volume breakout.

"Technically, we believe the stock is entering a new trading range, opening up for fresh 15-20% upside from the current levels. Further, as per the Fibonacci retracement, the 50% mark and 61.8% can be seen around 215-236 levels, suggesting the continuation of the trend. The positive placement of the averages and the increasing volumes in the weekly time frame suggest a near-term trend bullish. We recommend adding longs in the range of 205-198, with a stop loss below 184, for targets at 256 levels," the brokerage has said.

Stock Outlook

Last traded share price of Exide Industries is Rs. 205.75/share. Its 52 week high it touched on 18 May 2023 is Rs. 208.65/share. The stock's 52 week low is Rs. 130.25/share touched on 20 June 2022.

The stock jumped 8.49% in the past 1 week, while in the past 1 month, it jumped 10.09%. It gave 42.14% positive return in 1 year and 36.03% in 3 years, respectively. It falls 19.08% in the past 5 years.

Disclaimer - The stock has been picked from the brokerage report of IDBI Capital. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.