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Automotive replacement growth remains strong. Exide Industries reported 20% yoy growth in the automotive four-wheeler replacement market in 3QFY15, which is the second consecutive quarter of >15% yoy growth. Gross margins have deteriorated on a yoy basis despite strong growth in the replacement market, as the company continued to support the channel with higher incentives. We believe EBITDA margins will improve in the coming quarters, led by lower lead costs, to 15% in FY2016 but retain our REDUCE rating as we believe the stock is fairly valued. We have increased our target price to `170 (from `160 earlier) as we roll over from March 2016 to September 2016 while keeping our earning estimates almost unchanged.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
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Automotive battery segment posts strong growth in 3QFY15 Exide Industries reported 20% yoy growth in automotive four-wheeler replacement volumes in 3QFY15 after 17% yoy growth in 2QFY15. The company indicated it did not change prices in the replacement segment and gained market share in the past two quarters. The company expects to maintain its market share in the automotive replacement market and focus on improving profitability in the replacement segment. Lead prices have declined by 10% from September 2014 levels, which we believe could start reflecting partly in 4QFY15. Excise duty was raised by 2% on batteries in January 2015 that has not been passed on by battery companies, which will offset the benefit of decline in lead prices. The company indicated OEM battery volumes were flattish in the quarter and two-wheeler replacement volumes grew by 15% yoy. Industrial battery segment posts strong growth in revenues in 3QFY15 Industrial battery revenues grew by 37% yoy in 3QFY15 for Exide Industries led by 50% yoy growth in the inverter battery business due to low base. The company expects 12-15% yoy growth in the industrial business in FY2016 with the recovery in economy but it could remain volatile, as the inverter battery business forms a chunk of Exide’s industrial business. 3QFY15 results were better than expectations due to higher industrial sales Exide reported a net profit of `972 mn (+26% yoy) in 3QFY15 led by better-than-expected growth in the inverter battery business, which resulted in better-than-expected gross margin. EBITDA grew by 26% yoy due to strong revenue growth and 70 bps yoy improvement in EBITDA margin. Other income was lower than our estimates, as no dividends were received from the subsidiaries.
LINK
http://www.kotaksecurities.com/pdf/indiadaily/indiadaily03022015ga.pdf
Automotive replacement growth remains strong. Exide Industries reported 20% yoy growth in the automotive four-wheeler replacement market in 3QFY15, which is the second consecutive quarter of >15% yoy growth. Gross margins have deteriorated on a yoy basis despite strong growth in the replacement market, as the company continued to support the channel with higher incentives. We believe EBITDA margins will improve in the coming quarters, led by lower lead costs, to 15% in FY2016 but retain our REDUCE rating as we believe the stock is fairly valued. We have increased our target price to `170 (from `160 earlier) as we roll over from March 2016 to September 2016 while keeping our earning estimates almost unchanged.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
Automotive battery segment posts strong growth in 3QFY15 Exide Industries reported 20% yoy growth in automotive four-wheeler replacement volumes in 3QFY15 after 17% yoy growth in 2QFY15. The company indicated it did not change prices in the replacement segment and gained market share in the past two quarters. The company expects to maintain its market share in the automotive replacement market and focus on improving profitability in the replacement segment. Lead prices have declined by 10% from September 2014 levels, which we believe could start reflecting partly in 4QFY15. Excise duty was raised by 2% on batteries in January 2015 that has not been passed on by battery companies, which will offset the benefit of decline in lead prices. The company indicated OEM battery volumes were flattish in the quarter and two-wheeler replacement volumes grew by 15% yoy. Industrial battery segment posts strong growth in revenues in 3QFY15 Industrial battery revenues grew by 37% yoy in 3QFY15 for Exide Industries led by 50% yoy growth in the inverter battery business due to low base. The company expects 12-15% yoy growth in the industrial business in FY2016 with the recovery in economy but it could remain volatile, as the inverter battery business forms a chunk of Exide’s industrial business. 3QFY15 results were better than expectations due to higher industrial sales Exide reported a net profit of `972 mn (+26% yoy) in 3QFY15 led by better-than-expected growth in the inverter battery business, which resulted in better-than-expected gross margin. EBITDA grew by 26% yoy due to strong revenue growth and 70 bps yoy improvement in EBITDA margin. Other income was lower than our estimates, as no dividends were received from the subsidiaries.
LINK
http://www.kotaksecurities.com/pdf/indiadaily/indiadaily03022015ga.pdf
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