Exide Inds

The numbers came in after the market closed. Through the day yesterday, the stock was down but the numbers came in at expected lines and this is expected to give the stock some reprieve. The company ended the quarter with a net profit at Rs.159 crore, up 5% (YoY) and up 9% (QoQ). Net revenue rose 5% at Rs.1627 crore. Though raw material cost rose 10% (YoY), the company kept a tight leash on the other operating costs and this boosted its EBIDTA, which was up 12% at Rs.261 crore. The most gratifying aspect of the numbers were the OPM, which jumped by a very healthy 120 bps at 16.1%. This is a very good set of numbers given the fact that its user industry, the auto sector has been witnessing a consistent downturn through Q1 . Performance of industrial and hope UPS battery sales remained down.

Clearly, better cost management, a good product mix is what really helped. Increased sales growth in after-market segment of the automotive battery segment is what really buoyed the numbers. Looking ahead, the consistent rupee depreciation will mean higher raw material cost for the company and despite lower offtake of auto sector, it can maintain margins only if it hikes rates.  In Q1, price of lead increased 7% and it was price hike in Q4 which helped the margins.