Exide Industries Ltd (EIL) sales grew by only 1.5% YoY to Rs 7,702 m for FY01, due to the slowdown in the auto segment. The company's third quarter was the worst hit. However due to a pick in demand for passenger car segment in 4QFY01, the company's overall sales in this quarter improved by 10% YoY.
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As a result of higher competition in the auto battery segment and the rising raw material prices, the company's operating profits fell by 4% YoY to Rs 1,398 m in FY01. In 4QFY01, the company's operating profits declined by 11% due to a sharp fall in margins.
The company's operating margins have declined to 18.2% in FY01 from 19.2% in FY00, due to its worst performance in the third quarter., 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.
The company's net profit declined by 14.8% YoY to Rs 416 m for FY01 and by 21% to Rs 136 m for 4QFY01. We were expecting a full year net profit of Rs 422 m for FY01, as these results are close to our projections, we will continue to mainatin our forecast for FY02E at Rs 459 m and FY03E at Rs 531m.
On the current price of Rs 64, Exide is trading at 5.5x FY01 EPS of Rs 11.6.
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