Exide Industries Limited designs, manufactures, markets and sells a range of lead acid storage batteries. It operates through Storage Batteries & allied products, Life Insurance Business and Others segments. It offers a range of products, including automotive batteries, solar batteries, submarine batteries, industrial batteries, genset batteries, inverter batteries and home uninterruptible power supply systems.
|Market Cap. (Cr.)||16507.00|
|52 Wk. high/low||274/166|
|Book Value (Rs)||74.79|
- Company is focusing on Cost Control and Technology up gradation as strategies to improve the bottom-line
- Exide’s September quarter EBITDA margin expansion of 14.1%, from 12.2% in the year-ago period, came on the back of benign lead prices. Raw material cost as a percentage of sales fell by 310 basis points year-on-year.
- Lead accounts for about two-thirds of the input cost for making batteries. The drop in raw material cost offset the poor operating leverage in the quarter. Sluggish auto segment apart, even the telecom segment was dull, while the uninterrupted power supply systems and solar power segments fared a tad better. The silver lining was the higher mix of replacement market sales, where realization on sales and profit margins are better.
- The net profit of ₹237 crore was higher y-o-y after adjusting for an exceptional gain of ₹108 crore in the year-ago period.
- Eyeing at the country’s electric vehicle (EV) market and grid-based applications, Company will start manufacturing lithium-ion batteries from December. It had formed a joint venture (JV) in a ratio 75:25 with Switzerland-based Leclanch SA, one of the world’s leading energy storage solution companies, in June last year.
- The Company recently launched e-rickshaw brand ‘Exide Neo’ that would be built at Dankuni, will help the company with incremental revenue of Rs 120 crore in the first year of operation. The. Company would also explore the possibility of having e-rickshaws with lithium-ion batteries.
- Automotive industry (PV, 2/3W) continue to witness de-growth of -22%YoY in Q2FY20 due to lower demand, liquidity crunch and higher insurance cost. Exide Industries will be the direct beneficiary from any structural change in the auto demand owing to its leadership position having 60% market Share in the automotive battery and 86% market share in 2W.
Exide Industries is the market leader in the automotive battery industry with over 60% market share. We expects Automotive and telecom batteries continue to be under pressure for some more time while UPS and Solar power segments performing well and will continue its northward trend. The company has reported earnings of 5.43 in H1, we are estimating FY20 EPS to be around Rs 10.60. Based on eFY20 earnings the company is available at a PEx of 18.4x and valuing its insurance business around 25 per share. Based on these estimates we are positive on this company and recommend to buy with a target price of 235 in medium to long term point of view.
DISCLOSURE IN PURSUANCE OF SECTION 19 OF SEBI (RA) REGULATION 2014
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