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Exide Industries Ltd. | Q2FY14 Result Update




IndiaNivesh Securities Pvt Ltd


23 Oct 2013





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Exide Industries Ltd. | Q2FY14 Result Update PAT below street expectations due to de growth in revenue Exide Industries reported Q2FY14 numbers (Standalone) below street expectations due to lower sales volume for both Automobile (especially OEM) and industrial batteries. Revenue decreased by 6% y-o-y and 12% q-o-q to Rs. 14.28 bn significantly lower than consensus of Rs. 14.28 bn. However, despite lower sales growth the company is able to manage operating margin in a challenging macroeconomic environment on the back of continuous price hike. Reported PAT stood at Rs. 1.18 bn vs. consensus of Rs 1.58 bn due to lower top line and higher input cost. EBITDA margin contracted by 207 bps q-o-q (up 169 bps y-o-y) due to higher raw material cost dragged by increase in lead prices along with significant Rupee depreciation. Raw material cost increased by 130 bps q-o-q to 65.6% in Q2FY14 (as a percentage of sales) due to increase in lead prices coupled with Rupee depreciation. Valuation: We expect that demand of Automobile (especially OEM) and industrial batteries will recover in H2FY14. However, higher lead prices and Rupee depreciation are major concern for the stock. At CMP of Rs 127, Exide is trading at 13.8 x FY15E EPS (historical average 18x of 1 year forward PE). We maintain hold rating on the stock with target price of Rs. 147.

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