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Exide Industries (EXID)
Automobiles
Operationally weak quarter. 1QFY12 net profit of Rs1.63 bn (-1% yoy, flat qoq) was
8% below our estimates due to lower-than-estimated revenues, higher material costs
and adverse product mix. Revenues were 6% below our expectations due to slowdown
in inverter volumes and lower-than-estimated increase in replacement automotive
battery volumes. We will review our rating and earnings estimates post conference call
today.
Lower industrial revenues impacted profitability in 1QFY12
Exide reported a 1% yoy decline in net profits due to 5% yoy decline in EBITDA margins. Revenues
were 6% below expectations due to lower inverter revenues and lower-than-forecasted increase in
automotive replacement battery volumes. We had forecasted a 8% qoq increase in revenues as we
expected an improvement in inverter battery volumes and improvement in replacement/OEM
automotive battery product mix. EBITDA margins improved sequentially to 17.9% (+50 bps qoq)
aided by a 16% qoq decline in staff costs while raw material costs increased during the quarter.
Other expenses to net sales were in line with estimates. Other income increased sharply during the
quarter (after excluding Rs207 mn of one-off gain in 4QFY11 due to prepayment of sales tax loan
to Tamil Nadu government).
We expect EBITDA margins to remain subdued in 2QFY12E due to delay in ramping up capacities
and expect an improvement in EBITDA margins from 3QFY12E onwards. We are, however,
concerned on the increasing competitive intensity in the industrial battery segment given
aggressive expansion plans of Mahindra powerol and other local brands.
We will review our rating and estimates post conference call today
We see downside risks to our earnings estimates given delay in ramping up automotive battery
capacities and increase in competitive intensity in the industrial battery segment. We expect stock
price to remain under pressure in the near term as we do not expect 2QFY12E EBITDA margins to
improve significantly from current levels. We would review our rating and earnings estimates post
conference call today.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Exide Industries (EXID)
Automobiles
Operationally weak quarter. 1QFY12 net profit of Rs1.63 bn (-1% yoy, flat qoq) was
8% below our estimates due to lower-than-estimated revenues, higher material costs
and adverse product mix. Revenues were 6% below our expectations due to slowdown
in inverter volumes and lower-than-estimated increase in replacement automotive
battery volumes. We will review our rating and earnings estimates post conference call
today.
Lower industrial revenues impacted profitability in 1QFY12
Exide reported a 1% yoy decline in net profits due to 5% yoy decline in EBITDA margins. Revenues
were 6% below expectations due to lower inverter revenues and lower-than-forecasted increase in
automotive replacement battery volumes. We had forecasted a 8% qoq increase in revenues as we
expected an improvement in inverter battery volumes and improvement in replacement/OEM
automotive battery product mix. EBITDA margins improved sequentially to 17.9% (+50 bps qoq)
aided by a 16% qoq decline in staff costs while raw material costs increased during the quarter.
Other expenses to net sales were in line with estimates. Other income increased sharply during the
quarter (after excluding Rs207 mn of one-off gain in 4QFY11 due to prepayment of sales tax loan
to Tamil Nadu government).
We expect EBITDA margins to remain subdued in 2QFY12E due to delay in ramping up capacities
and expect an improvement in EBITDA margins from 3QFY12E onwards. We are, however,
concerned on the increasing competitive intensity in the industrial battery segment given
aggressive expansion plans of Mahindra powerol and other local brands.
We will review our rating and estimates post conference call today
We see downside risks to our earnings estimates given delay in ramping up automotive battery
capacities and increase in competitive intensity in the industrial battery segment. We expect stock
price to remain under pressure in the near term as we do not expect 2QFY12E EBITDA margins to
improve significantly from current levels. We would review our rating and earnings estimates post
conference call today.
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