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Top Battery Stocks in India

Today, we are heading towards a sustainable future of battery stocks in India. We envision a future where the vehicles will run on clean, green energy, where batteries are the driving force behind this transformation. Electric vehicles are going to become our primary mode of transportation. According to the 2024 budget, the automobile industry welcomes the expansion of the EV ecosystem. The government has been actively promoting EV adoption through various schemes like FAME II and the National Electric Mobility Mission Plan( NEMMP). These initiatives offer subsidies and incentives to manufacturers and consumers, encouraging investment in lithium batteries and manufacturing EV production in India.

Finance Minister Nirmala Sitharaman stated in the budget that “ Greater adoption of e-buses for public transport networks will be encouraged through payment security mechanisms.” The budget allocation has been raised to ₹3,500 crore for 2024-25 from ₹483.77 crore in 2023-24. Strengthening the electric vehicle ecosystem by supporting manufacturing and charging infrastructure will boost the development and adoption of EVs in the country.

After all these major changes made by the government in the industry, a huge emerging benefit is there for the investors as well. This might be the chance for the investors to charge up their portfolio through top battery stocks in India. Let us explore more why this will be a great benefit for you.

How Batteries are Transforming the Automobile Industry?:

Lithium-ion batteries were initially developed and commercialized for use in laptops and electronics for consumer use later on with their high energy density and long life cycle they became the leading battery type for use in electric vehicles. In recent years India has seen a significant increase in the adoption of electric vehicles (EVs) and electrical vehicle stocks. According to the Society of Indian Automobile Manufacturers (SIAM), EV sales in India reached 1.56 lakhs in FY 2020-21 making a 19% growth compared to the previous fiscal year. This sudden increase in demand for EVs has propelled the need for advanced lithium battery technology in the country. The reasons for this increase in EV adoption are:

Less emissions: EV-powered batteries produce zero emissions helping to reduce air pollution and fight climate change. As the government is encouraging to use of cleaner transportation the shift words the electric vehicles is increasing and this advantage is attracting customers who are looking for a clean and smooth driving experience in vehicles
Lower maintenance cost: Since there is no need for oil change or brake wear etc the maintenance cost of electric vehicles is much lower.
Combined with renewable energy: Electric vehicles can be charged using renewable sources of energy like wind and solar power which further reduce carbon emission and contribute to a more sustainable future.
Better performance: No doubt EVs provide a smooth driving experience and quick accelerations compared to our traditional vehicles and this

These are only some of the reasons. We can go on and on about the multifold transformation batteries bought in the automobile industry.

Best Battery Stocks in India in 2024 :

The top companies in India by market capitalization are:

Govt initiative in Battery sector

In India’s journey towards becoming a viksit (developed) Bharat by 2047, the government isn’t just promoting electric vehicles but also tightening regulations on traditional vehicles. Air pollution is an important concern in developing countries like India while developed nations like China and Singapore are adopting these electric vehicles at a rapid pace.

It is time for India to emphasize the vision of securing the “developed country” tag by 2047 and adopting electric vehicles and renewable energy could be the first step. The government aims to have 30% EVs by 2030. Government initiatives promoting electric vehicles and renewable energy adoption have also boosted the market in this region.

For instance, according to TOI in 2023, Hong Kong’s Tauschen International Pvt Ltd signed the top four MoUs in the MSME sector. Tauschen E-Motors Pvt Ltd, a subsidiary of Tauschen International, plans to invest Rs 4,100 crore to establish manufacturing facilities for electric vehicles in Agra. Additionally, the company’s Indian subsidiary will set up a lithium battery plant in Agra, investing Rs 1,640 crore. Overall, Tauschen International is likely to invest a total of Rs 10,000 crore in these projects.

The government has taken initiatives for the stakeholders of EVs to increase the demand for electric cars and encourage the manufacturers.

The FAME-11 scheme started on April 1, 2015, to reduce the use of gasoline and diesel vehicles and increase EV adoption in India.
PLI scheme- This scheme provides various benefits to the manufacturers and provides subsidies to EV buyers. Making it easy to sell EVs at a lesser price to clients.
Battery switching policy- This initiative by the government aims to standardize EV batteries across India by promoting EVs in sectors like delivery and intercity transportation because swapping a depleted battery for charged ones will be easier and faster than on-the-spot charging which takes hours to charge. Moreover, this will help the EV manufacturers as well because the standardisation will make spare parts more available and reduce the battery costs.
Special electric mobility zone– The government of India plans to create special zones where only electric vehicles will be allowed. This initiative was similarly taken in Europe and China, this helps to reduce the traffic by traditional cars. People living in these areas will drive their EVs and use public EV transportation.
Tax reduction on EVs etc – the government of India has reduced the taxes on EVs this move will aim to make Eva more affordable and overall will encourage to adopt EV mode of transportation.

So far the government has announced these incentives.

Factors Influencing Battery Sector Stocks :

Access to resources: BIG Companies like Panasonic, livent, etc have great access to resources like lithium cobalt, nickel, etc which gives them a competitive advantage in the market.
Recycling- From waste to wealth! Reusing batteries and e-waste management can play a huge role in the company’s gaining traction. Companies that invest heavily in recycling technologies and partner with other companies to reuse the batteries have long-term benefits in the market for the future.
Renewable energy: There is a big opportunity for those Companies that are set up in areas where there is an abundant source of renewable energy States in India’s western and southern regions have abundant variable renewable energy (VRE) sources available,
Collaborating Technologies: companies with advanced battery management systems or proficiency in battery intelligence can collaborate with companies with expertise in design and manufacturing or better software solutions and can enhance the overall predicted offering and make it competitive in the market.
As the government pushes towards using clean transportation consumer preferences are changing. The demand for batteries increases as these eco-friendly products and sustainable practices are gaining the hype. So companies that have their product portfolio aligned to these trends are ready to gain the market share.

Why should you invest in battery stocks?

India’s automotive sector contributes 7.1 % to the country’s GDP and this sector is expected to grow further in the next 5 years. A report by JMK Research estimates the annual lithium-ion battery market in India to increase at a CAGR of 37.5% to reach 132 GWh in 2030. The cumulative lithium-ion battery market size is estimated to increase from 2.9 GWh in 2018 to about 800 GWh by 2030.

Companies like Exide Industries Ltd and Amara Raja Batteries Ltd are leading in the market. All these data show that battery stocks and lithium-ion stocks are the most trending type stocks to consider for investment.

Smart Tips for Investing in Battery Stocks :

Think smarter, play smarter, the battery industry is ready to grow at a rapid pace but the question is how can you make the most of this opportunity? Below are some tips that you can take to help you invest in battery stocks:

Understand the technology: when we first explore the market before buying any product similarly battery industry also has different types of battery technologies available like lithium-ion, solid state, Sodium-Ion Batteries, etc . so before blindly investing in the top leading companies in the battery industry make sure that you know and understand this industry. There are many options and each has its own strengths and weaknesses, so make sure that you know well about the industry which will help you make a better investment decision.

The battery industry is subject to highly evolving regulations and standards for the safety of the environment. Make sure that you are updated with the latest changes in the regulations of the battery sector.

Explore the company’s CSR policies: make sure that you go through the company’s corporate social responsibility( CSR) policy regarding the environmental impact and sustainable practices to assess the investment potential in the battery sector. Companies with strong CSR policies indicate that they prioritise sustainability which can have a positive impact in their long-term growth and reputation.
Updated on market trends: finally stay updated with the changing market trends, conditions, company performance, and consumer preferences. You can also subscribe to an industry newsletter, follow top industry analysts, attend conferences to stay ahead, and lastly follow Univest to get timely updates on the battery sectors including news, analysis, and insights from industry experts

Risks of Investing in Battery Shares :

As far as attractive it sounds to invest in the top battery stocks in India it is also important to further the risks associated with it. The journey could be rewarding as well as risky so take every step with proper measure.

Here are some risks mentioned that are associated with battery stocks:

Increasing competition: as we head faster towards a sustainable future, there is an increase in the adoption of EVs and renewable energy by the people. So the players in the market are ready to compete with each other which will affect the growth prospect of individual lithium battery stocks. Moreover, new players are entering the market regularly, Therefore it is important for the investor to look for the top battery stocks in India or the companies that have a strong competitive edge in the market and can survive in this competition.
Regulatory changes and standards: changes in the regulations and standards like strict emission standards or recycling requirements mandatory etc can increase the cost for battery manufacturers which will in turn affect their profitability. So the battery industry is subject to highly evolving regulations and standards for the safety of the environment.
The evolution of battery technology: there have been many technological advancements in battery technology over the years, from lithium-ion to solid-state batteries, then graphene batteries to advanced battery management systems and now even recycling technologies for batteries. The advancement in this sector has been rapid. So you don’t know what better might come next., search for the best battery company in India to invest that is playing at the forefront in this innovation and invest in them!
Consumer acceptance and adoption: Well at last the success of electric vehicles and other battery products depends largely on consumer acceptance and adoption. Some regions are not fully developed to introduce such technologies, so people might not be in favor of adopting them yet. Factors such as EV mobility zones, charging infrastructure, affordable options etc are not available everywhere, it might take a long time for people to accept it, but yes there is a potential for investing in the best battery stocks in India in the long run.

Conclusion

To sum it up, the battery sector in India is ready to witness remarkable growth, driven by the increasing adoption of electric vehicles and the government’s initiatives to promote clean energy. And with this transformation of the automobile industry towards electric vehicles is creating new opportunities for investors in battery stocks.

However, investing in battery stocks comes with risks, such as increasing competition, regulatory changes, and the pace of consumer adoption of electric vehicles. Investors must stay informed about market trends, technological advancements, and company performance to make informed investment decisions.

Despite the risks, the battery sector presents significant potential for growth and innovation. With the right research and understanding of the industry, investors can position themselves to benefit from the evolving landscape of battery technology and sustainable energy solutions in India.

Disclaimer: This is for general information and education purposes only. The Securities quoted (if any) are for illustration only and are not recommendatory. Past performance does not guarantee any future returns. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. For more details/disclosures, visit at univest website and mobile application.

Top Battery Stocks in India 2024