About ATC Energies System Limited

Business Overview

ATC Energies System is a producer and supplier of lithium-ion batteries, offering efficient and cost-effective energy storage solutions for industries such as banking, automobiles, and more. Operating from factories in Vasai, Thane, and Noida (NCR), the company utilizes advanced in-house development, assembling, and quality testing infrastructure across 3,160 sq. mt.

Initially focused on mini batteries (up to 100Wh) for POS and ATM machines, the product portfolio has expanded to include small (101-750Wh), medium (751-2,000Wh), and large (above 2,000Wh) batteries for diverse applications. An in-house team handles design, engineering, and customization to meet specific end-use requirements.

85-90% of raw materials are imported from China, with the remainder sourced locally. While lithium reserves exist globally, high-grade deposits are concentrated in Argentina, Australia, Chile, and China. The cadmium, lead, and mercury content in ATC batteries is within international safety limits, ensuring minimal environmental impact during disposal.

As on February 28, 2025 the Company had 81 employees out of which approximately 33% were women. The Bankers to Company are Kotak Mahindra Bank Limited, IndusInd Bank Limited, and ICICI Bank Limited.

Industry Analysis

Lithium-Ion Battery Industry Overview

Storage batteries, also known as rechargeable batteries, consist of one or more electrochemical cells that allow reversible electrochemical reactions. These batteries, while having a higher initial cost compared to disposable batteries, offer the advantage of being rechargeable and reusable multiple times. They are widely utilized in applications such as motor vehicles and backup power supply units.

Several battery chemistries are commercially available, including lead-acid, nickel metal hydride (NiMH), nickel cadmium (NiCad), lithium-ion (Li-ion), and lithium-ion polymer (Li-ion polymer). Among these, lithium-ion batteries have gained significant traction due to their efficiency and versatility.

Lead-Acid Batteries: A Traditional Yet Relevant Choice

Lead-acid batteries have been in existence for over 150 years and remain a critical component in the energy storage industry. Known for their reliability and cost-effectiveness, these batteries continue to hold a substantial market share.

The lead-acid battery market is primarily segmented into two categories:

• Automotive Batteries: These include original equipment manufacturer (OEM) and replacement batteries, contributing nearly 50% of total battery sales.

• Industrial Batteries: Further classified into conventional flooded lead-acid batteries, valve-regulated lead-acid (VRLA) batteries, and nickel-cadmium batteries. Industrial applications span across sectors such as telecommunications, railways, power control, solar energy, and uninterruptible power supply (UPS) systems.

Despite the increasing adoption of lithium-ion batteries in electric vehicles (EVs) and large-scale energy storage, lead-acid batteries continue to dominate due to their lower production costs and widespread domestic manufacturing capabilities. In India, the affordability of lead-acid batteries, coupled with easy access to raw materials and labor, has ensured their continued dominance in the market.

Rise of Lithium-Ion Batteries

Lithium-ion (Li-ion) batteries have become a preferred choice for various applications, including portable electronics (such as smartphones, tablets, and laptops), electric vehicles (EVs), and renewable energy storage solutions. A key advantage of Li-ion batteries is their ability to be customized based on energy requirements, making them suitable for diverse applications.

Structure and Advantages

EV lithium-ion batteries differ structurally from those used in consumer electronics. While portable devices use smaller individual cells, EV batteries consist of multiple small cells grouped into modules, which are further assembled into traction battery packs.

Key benefits of Li-ion batteries include:

• High Energy Density: Li-ion batteries offer greater energy storage capacity compared to lead-acid and NiMH batteries, making them ideal for EVs.

• Lightweight Composition: Lithium is the lightest solid element and has the highest oxidation potential, contributing to superior battery performance.

• Longevity and Cost Efficiency: Despite higher initial costs (INR 30,000 for Li-ion vs. INR 7,000 for lead-acid), Li-ion batteries offer a significantly longer lifespan, making them a cost-effective choice in the long run.

Growth of India’s Lithium-Ion Battery Market

The Indian lithium-ion battery market is experiencing rapid growth, driven by rising demand across multiple sectors. The market, valued at approximately $2 billion, is projected to expand to $6 billion by 2026 and further to $15 billion by 2030 under an accelerated adoption scenario.

Between 2018 and 2021, the country’s cumulative Li-ion battery market grew from 2.9 GWh to 22.4 GWh, with an estimated further rise to 49.8 GWh in 2023. Between 2020 and 2023, the market saw a compound annual growth rate (CAGR) of 47%, fueled by:

• Advancements in battery technology

• Increased investment in renewable energy infrastructure

• Supportive government policies promoting green energy and sustainable transportation

Sectoral Demand and Market Segmentation

Currently, lithium-ion batteries in India are predominantly used in:

• Consumer Electronics: Smartphones, laptops, and tablets account for 50.4% (11.3 GWh) of total Li-ion battery deployment.

• Stationary Applications: Grid-scale energy storage systems contribute 40.2% (9 GWh) of demand.

• Transportation (EVs): The segment, though smaller, is growing rapidly, contributing 9.4% (2.1 GWh) of total consumption.

The consumer electronics segment has historically dominated the lithium-ion battery market. However, its share has declined from 61% in 2020 to 50.4% today, as demand from stationary applications and electric vehicles has surged. In 2020, stationary applications accounted for 36% of lithium-ion battery usage, while EVs accounted for only 3%.

Since 2016, the demand for advanced lithium-ion cells has increased significantly, driven by:

• Wider adoption in grid-scale renewable energy storage

• Accelerated EV penetration in India

• Technological advancements improving battery efficiency

Future Outlook

The lithium-ion battery market in India is poised for significant transformation, with increasing demand from renewable energy projects and electric mobility. As leading companies continue to expand production capacities and enhance battery efficiency, India’s reliance on lithium-ion batteries is expected to grow further. Additionally, strategic initiatives to localize battery manufacturing and ensure sustainable supply chains will play a crucial role in shaping the industry's future.

In Conclusion, while lead-acid batteries maintain a strong presence due to cost advantages, lithium-ion batteries are rapidly gaining prominence in India’s energy and transportation sectors. With government support, technological advancements, and a shift towards sustainable energy solutions, lithium-ion batteries are set to redefine the future of battery storage in India.

Business Strengths

1. Diversified Product Portfolio
A wide range of battery solutions caters to various industries and applications, from banking to electric vehicles. The ability to customize and tailor products enhances market resilience, positioning the company as a versatile and reliable supplier capable of meeting evolving technological demands.

2. Focus on Quality and Performance
Stringent quality control ensures high reliability, safety, and superior performance in critical applications like EVs, medical devices, and renewable energy storage. This commitment has minimized failures and recalls, reinforcing consumer trust and loyalty.

3. Experienced Leadership and Skilled Workforce
Promoter Sandeep Gangabishan Bajoria, with 25 years of entrepreneurial experience, provides strategic vision and industry insights to drive growth and innovation. A highly skilled workforce ensures efficient operations, continuous improvement, and a competitive edge in product development and market adaptation.

4. Stable Financial Performance
Revenue from operations grew from ₹3,648.30 lakhs in FY22 to ₹5,120.37 lakhs in FY24, with a six-month revenue of ₹2,249.41 lakhs as of September 30, 2024. Profits stood at ₹1,089.16 lakhs in FY24, with ₹577.15 lakhs recorded for the six-month period. Steady growth in revenue and profitability supports strategic expansion and future opportunities

Business Strategies

1. Expanding Business Scale & Operational Efficiency
Enhancing manufacturing efficiency through automation, new technology, and better equipment to minimize costs and improve resource utilization. Higher efficiency leads to increased production volumes, higher sales, and improved profit margins. Achieving economies of scale strengthens negotiation power in procurement and cost savings through centralized management.

2. Geographical Expansion
Strategic expansion beyond Maharashtra, Haryana, and Tamil Nadu to enhance market presence and reduce operational risks. Entering new regions enables access to local resources, reduced transportation costs, and faster deliveries. Building partnerships with local suppliers ensures a reliable supply chain and operational resilience.

3. Diversified Product Portfolio
Development of high-capacity lithium batteries for applications requiring extended battery life and higher power output. Introduction of eco-friendly battery solutions with recyclable materials and green assembling processes to align with sustainability goals.

4. Expanding Customer Base Through Targeted Marketing
Expanding corporate and retail clientele through strategic marketing campaigns focused on new industries and sectors. Utilizing data analytics to identify potential customers and tailor messaging to meet specific market needs, driving business growth and market penetration

Business Risk Factors and Concerns

1. Supply Chain Vulnerability
Heavy reliance on critical raw materials like lithium, nickel, cobalt, graphite, and manganese poses a risk of shortages, price volatility, and increased costs, affecting profitability. China's dominance in sourcing these materials further amplifies supply risks.

2. Customer Concentration Risk
A significant portion of revenue is derived from two promoter-group entities, M/s Agarwal Trading Company and M/s Hind Industries. A decline in orders from these entities may lead to financial instability and potential conflicts of interest.

3. Banking Industry Dependence
57% of total revenue (as of September 2024) comes from the banking industry, exposing operations to risks tied to this sector's fluctuations. Historical reliance on banking clients has seen revenues from this segment ranging from 58% to 92% in recent years.

4. High Dependence on Chinese Imports
Heavy reliance on Chinese raw materials (cells and Battery Management Systems) creates risks related to political tensions, trade disputes, supply disruptions, quality control, and increased competition, potentially impacting operations.

5. Logistics & Supply Chain Disruptions
Dependence on third-party logistics providers without long-term contracts poses a risk of delivery delays, operational disruptions, and non-fulfillment of commitments, affecting business continuity.

6. Export Market Uncertainties
Electric 2-wheeler battery exports to African countries accounted for 12.02% of revenue in Fiscal 2024. Risks include political instability, tariff increases, and regulatory changes, which could impact export sales and profitability.

ATC Energies System faces multiple operational and market risks, including supply chain disruptions, customer concentration, sector dependence, import reliance, logistics uncertainties, and export challenges. Heavy dependence on raw materials from China, limited customer diversity, and fluctuations in export markets could significantly impact business performance and profitability.