Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Exide Industries
Industrial slowdown impact; maintain Hold
Its industry dominance and backward integration measures are
long-running positives for Exide. However, slowdown in industrial
demand and hence lower pricing power, short-term capacity
constraints and fair valuations lead us to re-iterate our Hold rating.
4Q to be subdued. Capacity commissioning for Exide’s auto
segment in Apr ’11 would help it address replacement demand,
which is now inadequately serviced. However in 4Q, weaker
demand from the industrial segment and continuing capacity
constraints in the auto segment are likely to temper Exide’s sales
growth and profitability.
Industrial segment slowdown. The slowdown in user segments,
power, telecoms and railways, led to sluggish demand. Poor
demand has lowered Exide’s pricing power in the industrialbattery
segment, where it had been able to pass on price increases.
Change in estimates. We reduce our FY12e EBITDA margin
for Exide, by 3%, partially set off by higher other income, thereby
lowering our FY12e standalone EPS, by 3.8%.
Valuation and risks. We value the standalone business at oneyear
forward PE of 16x. We value Exide’s stake in ING Vysya
Life Insurance at `12. Our target price is `149 (from `128). We
retain our Hold. Risks: Upside: recovery in industrial demand,
lower lead prices. Downside: auto demand slowdown, delayed
capex, industrial demand and pricing power being further lowered.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Exide Industries
Industrial slowdown impact; maintain Hold
Its industry dominance and backward integration measures are
long-running positives for Exide. However, slowdown in industrial
demand and hence lower pricing power, short-term capacity
constraints and fair valuations lead us to re-iterate our Hold rating.
4Q to be subdued. Capacity commissioning for Exide’s auto
segment in Apr ’11 would help it address replacement demand,
which is now inadequately serviced. However in 4Q, weaker
demand from the industrial segment and continuing capacity
constraints in the auto segment are likely to temper Exide’s sales
growth and profitability.
Industrial segment slowdown. The slowdown in user segments,
power, telecoms and railways, led to sluggish demand. Poor
demand has lowered Exide’s pricing power in the industrialbattery
segment, where it had been able to pass on price increases.
Change in estimates. We reduce our FY12e EBITDA margin
for Exide, by 3%, partially set off by higher other income, thereby
lowering our FY12e standalone EPS, by 3.8%.
Valuation and risks. We value the standalone business at oneyear
forward PE of 16x. We value Exide’s stake in ING Vysya
Life Insurance at `12. Our target price is `149 (from `128). We
retain our Hold. Risks: Upside: recovery in industrial demand,
lower lead prices. Downside: auto demand slowdown, delayed
capex, industrial demand and pricing power being further lowered.
No comments:
Post a Comment