Exide Industries is down in the red today. It fell over 5% to Rs.198.25 but has since then recovered to Rs.203 levels, nevertheless it remains in the red.

The company’s performance for Q2FY18 was disappointing. Despite a 23% (YoY) rise in revenue at Rs.2371 crore, its net profit slipped 26% to Rs.135 crore. This dent in profit was mainly on account of higher lead prices. What also dragged the profit down was a one-time expense of Rs.42 crore towards dispute settlement. 

Cost of lead, a crucial raw material accounts for two thirds of its total sales and this lead price has risen 25% over the past 4 months. Thanks to the effective costs management, where it kept a tight leash on employee and marketing costs, despite the price rise, its operating profit was a bit salvaged – it came in 2% up at Rs.296 crore but margins showed the pressure, falling from 13.3% t0 12.5% (YoY).