Exide Industries Ltd (EIL), has reported a net profit of Rs 36 m for 1QFY02, a decline of 48.2% YoY. The company's sales grew by 11% during this period to Rs 1,762 m, but higher expenses on account of staff and other expenses have taken a toll on the company's bottomline.
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On the sales front, the company saw a decline in automobile battery volumes in 1QFY02, especially in the utility, medium and heavy commercial vehicle segments. Demand from both OEM and replacement segments is down. The growth in 1QFY02 sales has come mainly from the industrial segment, and even in that from the submarine segment specifically.
The company's raw materials expenses at Rs 1,039 m grew by 10% YoY in 1QFY02, its staff costs grew by 13% to Rs 189 m and other expenses went up sharply by 28.5% YoY to Rs 405 m.
As a result of the above the company's operating margins fell from 20.7% in 1QFY01 to 17.0% in 1QFY02, despite a decent sales growth.
The extraordinary items relate to amortisation expenses, which occured due to payments for the company's voluntary retirement scheme, website development and ERP implementation costs.
EIL is India's largest automotive storage manufacturer. It also manufactures batteries which find use in heavy-duty applications like power and telcommunications. Exide has a 92% market share in the OEM segment and 85% in the replacement market.
Exide is likely to see better fortunes in 2HFY02 if the industrial and agricultural sectors improve resulting in higher demand from the automobile sector. On the current price of Rs 59.5 it is trading at 5.2x FY01, EPS of Rs 11.5.
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