Exide Industries Limited (EIL), has reported a net profit growth of 22.7% YoY in FY2000 to Rs 489 m as compared to Rs 399 m reported in FY99. The company's sales grew by 16.3% YoY to Rs 7,622 m on the back of a recovery in the OEM (Original Equipment Manufacturer) segment in FY2000.
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 has reported a net sales of Rs 7,622 m in FY2000.
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Its operating margins dipped slightly from 19.6% in FY99 to 19.1% in FY2000 on account of expenses increasing by 17% YoY due to higher raw material costs and other costs. EIL's figure of other adjustments in FY2000 showed a significant jump and this was mainly on account of loss in foreign currency used for working capital, amortisation of expenses on Y2K compliance, ERP implementation and amortisation of payments under the company's voluntary retirement scheme.
The company continues to have a market share of 92% in the original equipment market for automotive batteries. EIL's replacement sales grew by 21% YoY in FY2000 and it has a 63% market share in this segment. During the year the company introduced batteries for electrical vehicles and also batteries for the tractor market in Haryana.
The company plans on increasing its capacity in the Hosur factory from the current capacity of 40,000 batteries per month. It plans to spend Rs 770 m for capital expenditure in FY2001 and Rs 600 m in FY2002. EIL's dealer network has increased to over 4,000 during the year. It is also planning on e-commerce initiative and will leverage on its existing well established distribution network through out the country for this.
Analysts have been positive on Exide Industries due to good growth prospects in the automotive battery car market and have rated it as a "BUY". However in future the company needs to watch out for increase in competition. 86
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