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UBS Investment Research
Exide Industries
1 QFY12 results miss, maintain Buy
Event: 1QFY12 results highlights
1QFY12 PAT of Rs1.6bn (flat QoQ, -1% YoY) missed street and our estimates of
Rs1.8bn, on weak topline growth and lower EBITDA margins. As per company,
performance at the topline was hit primarily due to lower demand in the
automotive OE segment and inverter batteries. Revenues came in at Rs12.4bn
(+1% QoQ, +8% YoY), lower than consensus and our estimates at
Rs13.6bn/Rs14.2bn. EBITDA margin declined by 120bps sequentially and 500bps
YoY to 17.9%, largely due to higher lead prices and lag in passing it on.
Impact: Maintain estimates
In our view, slowdown in the auto OE segment shouldn’t impact the topline much
as it accounts for only 15-18% of the company revenues. The 1Q period is the peak
season for inverter batteries demand (26-28% of company revenues) which was hit
due to improved power supply situation and pleasant weather conditions. Exide is
able to pass on an increase in lead prices with one quarter lag.
Action: Maintain Buy with a PT of Rs 200
We reiterate our view that Exide remains well-placed to benefit from growth in the
auto aftermarket and emerging 2-wheeler push start aftermarket (higher margins vs
OEM), given its strong market position, brands and distribution. We forecast
FY11-13 earnings CAGR of 25% and estimate FY12 core ROCE/ROE of
75%/44%.
Valuation
Our SOTP derived PT is based on 16x FY13E PE for Exide’s core battery
business, to which we add value for its stakes in subsidiaries and insurance
business.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Exide Industries
1 QFY12 results miss, maintain Buy
Event: 1QFY12 results highlights
1QFY12 PAT of Rs1.6bn (flat QoQ, -1% YoY) missed street and our estimates of
Rs1.8bn, on weak topline growth and lower EBITDA margins. As per company,
performance at the topline was hit primarily due to lower demand in the
automotive OE segment and inverter batteries. Revenues came in at Rs12.4bn
(+1% QoQ, +8% YoY), lower than consensus and our estimates at
Rs13.6bn/Rs14.2bn. EBITDA margin declined by 120bps sequentially and 500bps
YoY to 17.9%, largely due to higher lead prices and lag in passing it on.
Impact: Maintain estimates
In our view, slowdown in the auto OE segment shouldn’t impact the topline much
as it accounts for only 15-18% of the company revenues. The 1Q period is the peak
season for inverter batteries demand (26-28% of company revenues) which was hit
due to improved power supply situation and pleasant weather conditions. Exide is
able to pass on an increase in lead prices with one quarter lag.
Action: Maintain Buy with a PT of Rs 200
We reiterate our view that Exide remains well-placed to benefit from growth in the
auto aftermarket and emerging 2-wheeler push start aftermarket (higher margins vs
OEM), given its strong market position, brands and distribution. We forecast
FY11-13 earnings CAGR of 25% and estimate FY12 core ROCE/ROE of
75%/44%.
Valuation
Our SOTP derived PT is based on 16x FY13E PE for Exide’s core battery
business, to which we add value for its stakes in subsidiaries and insurance
business.
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