Exide: Expanding its wings - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Exide: Expanding its wings

Nov 27, 2000

Exide Industries has announced its plans of acquiring two companies in the South East Asian region, as part of its expansion programme. The company has earmarked a total capital expenditure programme of Rs 2 bn spread over a period of three years. It is set to acquire a 100% stake in Chloride Batteries South East Asia in Singapore for a price of Singapore $ 3.8 m. Besides it will also acquire a 49% stake in Associated Battery Manufacturers in Sri Lanka for a consideration of SL Rs 112 m. It is also keen to set up an automotive battery manufacturing unit in Bangladesh and is looking out for partners.

This move will boost the company's exports, by giving exposure to South East Asian markets as well as enhance its product range. Currently it exports batteries mainly to Russia and the Middle East and exports account for less than 1% of the company's turnover. As the income statements of the above two companies are not available it is not possible to comment on the impact on Exide's earnings as and when the acquisitions take place.

As part of its domestic capital expenditure programme, the company is in the process of setting up a new automotive battery manufacturing unit with a capacity of 1 m units p.a. in Haryana by FY02. Exide plans to spend around Rs 700 m for this project. This expansion will take its installed capacity to nearly 9 m storage battery units from 7.9 m units in FY2000.

In the current year like other auto ancillary industries, automotive battery sales too have slowed down. This can be attributed to the slowdown in commercial vehicles and passenger cars. In FY2000, Exide's net rose by 23% YoY, as there were many new entrants in the passenger car segment and the industry as a whole was buoyant. In the 2QFY01, Exide's net grew by only 5% YoY to Rs 140 m as result of a slowdown in sales.

Though these acquisitions do not seem to be very large in terms of investments, they will help the company to some extent to protect itself from the downturn in the domestic auto market. Also the company will be faced with more competition in the domestic market, with the aggressive entry of Amaraja Batteries in the automotive segment. As of March 2000, Exide commands a 92% market share of the automobile battery market in the organised OEM segment and 63% of the organised replacement market.

On the current price of Rs 103, Exide is trading at 7x FY01E EPS of Rs 14.8. It is trading close to its 52 week low of Rs 85.

Equitymaster requests your view! Post a comment on "Exide: Expanding its wings". Click here!


More Views on News

EXIDE INDUSTRIES 2020-21 Annual Report Analysis (Annual Result Update)

Aug 12, 2021 | Updated on Aug 12, 2021

Here's an analysis of the annual report of EXIDE INDUSTRIES for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of EXIDE INDUSTRIES. Also includes updates on the valuation of EXIDE INDUSTRIES.

EXIDE INDUSTRIES Announces Quarterly Results (1QFY22); Net Profit Up 334.0% (Quarterly Result Update)

Aug 3, 2021 | Updated on Aug 3, 2021

For the quarter ended June 2021, EXIDE INDUSTRIES has posted a net profit of Rs 315 m (up 334.0% YoY). Sales on the other hand came in at Rs 35 bn (up 40.2% YoY). Read on for a complete analysis of EXIDE INDUSTRIES's quarterly results.

EXIDE INDUSTRIES Announces Quarterly Results (3QFY21); Net Profit Up 23.2% (Quarterly Result Update)

Feb 1, 2021 | Updated on Feb 1, 2021

For the quarter ended December 2020, EXIDE INDUSTRIES has posted a net profit of Rs 2 bn (up 23.2% YoY). Sales on the other hand came in at Rs 28 bn (up 16.2% YoY). Read on for a complete analysis of EXIDE INDUSTRIES's quarterly results.

India's Top EV Battery Makers are set for Sky High Returns (Views On News)

Sep 30, 2021

These 5 leading EV battery makers are poised to transform India's EV ecosystem.

5 Indian EV Battery Makers to Watch Out for (Views On News)

Jul 6, 2021

These companies are racing at warp-speed to make India the hub of EV battery manufacturing.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

How to Hit Rs 100 Crore Wealth in Your Lifetime (Equitymaster Wealth)

Nov 15, 2021

This is how you can achieve the ambitious goal of a net worth of Rs 100 crore.

Don't Sell these Stocks if the Market Falls (Profit Hunter)

Nov 17, 2021

These are the 3 types of stocks that you should not sell in a market crash.

MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

Nov 20, 2021

The Rs 19 bn issue is set to hit the market soon.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Nov 26, 2021 (Close)


  • Track your investment in EXIDE INDUSTRIES with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks