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Exide net falls 42% YoY - Views on News from Equitymaster
 
 
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  • Jan 22, 2001

    Exide net falls 42% YoY

    Exide Industries Ltd (EIL) sales have dropped by 8.4% YoY in the 3QFY01. This is mainly due to lower demand from the automobile segment. As a result of higher competition in the auto battery segment and the rising lead prices, the company's operating profits fell by 18% YoY to Rs 296 m in the 3QFY01. The company's net profit declined by a dismal 42% YoY to Rs 69 m for the 3QFY01.

    (Rs m) 3QFY00 3QFY01 Change 1HFY00 1HFY01 Change
    Sales 2,334 2,137 -8.4% 4,356 4,426.60 1.6%
    Other income 0 2 600.0% 5 4.30 -20.4%
    Expenditure 1,972 1,840 -6.7% 3,678 3,697.40 0.5%
    Operating profit (EBDIT) 361 296 -17.9% 678 729 7.5%
    Operating profit margin (%) 15.5% 13.9%   15.6% 16.5%  
    Interest 122 111 -9.6% 253 254.80 0.9%
    Depreciation 104 109 4.9% 192 209.50 9.2%
    Profit before Tax 135 79 -41.5% 239 269 12.6%
    Other adjustments 5 8   11 16.1  
    Tax 13 3   30 43  
    Profit after Tax/(Loss) 118 69 -41.6% 199 211 6.0%
    Net profit margin (%) 5.0% 3.2%   4.6% 4.8%  
    No. of Shares (eoy) (m) 36.0 36.0   36.0 36.0  
    Diluted number of shares 36.0 36.0   36.0 36.0  
    Diluted Earnings per share* 13.1 7.6   11.0 11.7  
    *(annualised)            

    Considering that automobile company volumes for the 3QFY01 have been worse off than their 1HFY01 figures, hence the demand conditions for Exide too were worse off.

    As a result the 3Q margins have been worse off than the 1HFY01 figures. Infact in the 1HFY01, the company reported a 6% increase in net profit to Rs 211 m and an improvement in operating margins to 16.5% from 15.6% in the 1HFY00. The company's operating margins have declined by 160 basis points YoY to 13.9% in the 3QFY01.

    EIL is India's largest automotive storage battery manufacturer. It also manufactures industrial batteries which find use in heavy-duty applications like power and telecommunications. After it took over Standard Batteries in FY98, Exide commands a 92% market share of the automobile battery market in the organised OEM segment and 85% of the organised replacement market.

    As a result of the dismal 3QFY01 performance we need to revise our full year forecast of Rs 534 m for FY01E downwards by atleast 25%.

    On the current price of Rs 100, Exide is trading at 7.4x FY2000 EPS of Rs 13.6. Its shares have opened weak and have fallen by 5%.

     

     

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