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market | IST

Exide Industries shares in focus after company sells life insurance business; what brokerages say

Exide Industries is up about 2 percent, it is very close to its 52 week high of Rs 220 that is because Exide is selling its life insurance business at a premium to HDFC Life is something that has been taken very well by the street. UBS as a buy call, they have raised their target price to Rs 240 rupees on the stock.

Exide Industries shares were in focus on Monday after the company's board decided to divest its entire shareholding in wholly-owned subsidiary Exide Life Insurance Company to HDFC Life Insurance Company.
Exide Industries shares traded marginally lower in late afternoon deals, having given up a gain of more than 2 percent earlier in the day.
Brokerages gave a big thumbs up to Exide's decision to sell its life insurance business at a premium to HDFC Life.
UBS
The brokerage has a 'buy' call on Exide with a raised target price of Rs 240. This is a lucrative valuation for the company's life insurance business. The valuation of the life insurance business is lucrative, as the HDFC Life deal values Exide Life at Rs 79 per share, much higher than the target of Rs 30 per share, according to UBS.
Nomura
The brokerage has a 'buy' rating on Exide with a target of Rs 223 apiece. The transaction implies that the company's EV to EBITDA of 3.50 times FY23 earnings is quite attractive, according to Nomura.
Citi
The brokerage has a 'buy' call on Exide with a raised target price of Rs 260 a share. According to Citi, the sale of the life insurance business removes an overhang from the valuation perspective of the stock. Investors had concerns on what the capital deployment plans would be in unrelated businesses like life insurance, and now that the life insurance business is sold, that overhang goes away. At 2.50 times the FY21 embedded value, the value received is very attractive.