The rally in the stock has been fuelled by the reports that the company has received an order to supply VRLA (valve regulated lead acid) batteries to APC, USA, for manufacture of uninterrupted power supply (UPS) systems. APC caters to almost 80 per cent of UPS in the US. Exide Industries will supply 40,000 batteries exclusively to APC.

The Exide Industries' facility at Hosur, set up in technical collaboration with Shin-Kobe of Japan at a cost of Rs 45 crore, has a capacity to manufacture one million VRLA automotive batteries.

According to marketmen, the company is also intalks with a German battery company for a strategic alliance to manufacture `DIN' batteries for European cars. Although the deal is yet to go through, the talks are learnt to be in the final stages.

While analysts fear that Exide may be hit by the new Exim policy, which puts batteries under the OGL, they say the company's stronghold in the original equipment market and wide distribution network with 3000 dealers will give it an edge over foreign competition. Besides, the company is taking several initiatives to become an exporter.

Analysts expect Exide Industries to register a turnover of over Rs 1000 crore in the next couple of years. The company reported a turnover of Rs 655 crore in fiscal 1999. In order to fight competition, the company plans to invest Rs 50 crore in the current fiscal to upgrade its plant and technology.

In addition, the company will concentrate on capturing a substantial market share in the industrial batteries segment, which is a high margin business. The industrial batteriessegment has been growing for the last five years. In the first quarter of the current fiscal, the segment has grown at 17 per cent.

With demand for automobiles is picking up, Exide Industries (which commands a 70 per cent share in the OEM market) should be biggest beneficiary. This is evident from the company's performance in the first quarter of FY 2000. The company has reported a 18 per cent growth in turnover to Rs 156.6 crore. In the first quarter, the OE segment for automotive batteries grew by 20 per cent after a long year of negative growth.