Exide Industries Ltd.|Q2FY15 Result Update | Strong top line growth, EBITDA margin below expectation :: IndiaNivesh

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->

Exide Industries reported Q2FY15 numbers (Standalone) below our expectations.
The company witnessed impressive 23 % YoY growth in top line which was offset by
228 bps EBITDA margin contractions. Revenue increased by 23% y-o-y to Rs. 17.61
bn (slightly above our estimates of Rs. 17.2 bn) on the back of continued efforts on
marketing and distribution side. EBITDA margin contracted 228 bps YoY to 11.8%
due to poor product mix(higher proportion of OEM’s sales), unfavorable currency,
higher discount coupled with increase in marketing and distribution expenses.
Though lead prices remain flat, Raw material cost (including stock adjustment)
expanded by 153 bps YoY to 67.2% in Q2FY15 (as a percentage of sales) due to
depreciation in Rupee. Reported PAT stood at Rs. 1.25bn vs. our expectation of Rs.
1.32 bn due to lower EBITDA.
We expect improvement in OEM’s demand and higher volume growth are positives
for the company. Post FY14 the company has focused on marketing and distribution
initiatives as a result top line numbers reported 20% growth and bottom line
recorded 12% growth in H1FY15. In Q2FY15, Exide has suffered a fall in operating
margin mainly on account of rise in marketing & selling expenses due offering
discounts and increase in the distributors incentives with the objective to regain
market share and win/maintain distributors loyalty. However, this loss should not
be seen in isolation. In the last nine months, the company has experienced significant
recovery in volumes which is an important factor. Therefore, in the coming times,
we expect the continued efforts on marketing and distribution side could lead to
strong top line growth momentum which eventually to support the profitability.
Further, correcting lead prices and higher operating leverage would help to revive
margin in Q3FY15.

LINK
http://www.indianivesh.in/Admin/Upload/635494794857041250_Exide%20Industries_Q2FY15%20Result%20Update.pdf