Earnings Outlook
Exide may report volume, price driven growth in Oct-Dec
This story was originally published at 15:41 IST on 24 January 2025
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By Avishek Rakshit
KOLKATA – The growth in the country's automobile sector during Oct-Dec is expected to have helped battery-maker Exide Industries Ltd.'s financial performance, though it may not be spread evenly across its sales divisions.
Exide Industries' revenue in Oct-Dec is seen at INR 41.6 billion, up 8.3% on year, but down 2.5% sequentially, according to an average of estimates from nine brokerages. The net profit is estimated at INR 2.7 billion, up 11.0% on year, but down 10.5% sequentially.
Exide reported a net profit of INR 2.4 billion on revenue of INR 38.4 billion a year ago and a net profit of INR 3 billion on revenue of INR 42.7 billion in Jul-Sept.
Amongst the brokerages, Motilal Oswal Financial Services Ltd. has projected the highest revenue for Exide Industries at INR 43.0 billion and Anand Rathi Share and Stock Brokers Ltd. the lowest at INR 40.1 billion. Anand Rathi Share and Stock Brokers has estimated the highest profit after tax at INR 2.8 billion and Elara Securities (India) Pvt. Ltd. the lowest at INR 2.1 billion.
Exide Industries will declare its financial results for Oct-Dec on Jan. 28.
The company's revenue growth is expected to come from increased sales volume, especially in the replacement market, and the impact of the price hike carried out a quarter or two ago.
Kotak Institutional Equities, which has projected an 8% on-year increase in revenue, expects the company to have posted a 6-8% increase in sales volume in the replacement market. The replacement market refers to the after-sales segment when the battery that originally came with the vehicle is replaced. The brokerage expects Exide Industries to have registered a high-single-digit volume increase in the two-wheeler original equipment manufacturer or OEM segment.
Although Exide Industries normally does not disclose its segment revenue and profit, analysts tracking the company said that the automotive segment accounts for 70-75% of the company's total sales and the industrial battery segment, comprising the telecom sector, uninterrupted power supply, or UPS products, and others for the remaining 25-30%. Analysts estimate that out of the total automotive sales, the two-wheeler segment accounted for around 40% of Exide Industries' revenues.
Nuvama Wealth Management Ltd. said increased exports may also have helped Exide Industries report an increase in revenues.
Prabhudas Lilladher Pvt. Ltd., however, expects a much more muted performance by Exide Industries. The brokerage said the slow growth in the two-wheeler segment during Oct-Dec and muted demand for replacement batteries could lead to sluggish volume growth. The brokerage expects Exide Industries to report a 6% growth in revenue.
The Oct-Dec quarter saw robust growth in the passenger vehicle and tractor segments, driven by utility vehicles and exports and improved rural sentiment. However, domestic two-wheeler sales lagged due to a high base and competition, while exports remained strong, Prabhudas Lilladher said.
Exide Industries' revenue growth is also expected to have come from the industrial segment, Kotak Institutional Equities said. The expansion of the mobile network and increased deployment of broadband and high-speed data across the country is expected to have accounted for most of this demand. Exide Industries makes batteries used by telecom companies to power their network towers.
Exide is expected to report a 9% increase in its earnings before interest, tax, depreciation, and amortisation at INR 4.8 billion, as against INR 4.4 billion a year ago, according to the average of estimates from seven brokerages. Motilal Oswal Financial Services has estimated the highest EBITDA at INR 4.9 billion and Prabhudas Lilladher the lowest at INR 4.6 billion.
Following are the Oct-Dec earnings estimates for Exide Industries based on reports from nine brokerage firms in descending order by the estimate of net profit:
Broker Name | Net Sales (in million rupees) | Net Profit (in million rupees) | EBITDA (in million rupees) |
Anand Rathi Share and Stock Brokers Ltd | 40,113.00 | 2,820.00 |
|
Motilal Oswal Financial Services Ltd | 43,014.00 | 2,818.00 | 4,947.00 |
Nomura Equity Research | 41,275.00 | 2,786.00 | 4,895.00 |
Kotak Institutional Equities | 41,373.00 | 2,757.00 | 4,836.00 |
Sharekhan Ltd | 42,440.00 | 2,740.00 |
|
Nuvama Wealth Management Ltd | 41,401.00 | 2,737.00 | 4,873.00 |
Incred Research Services Pvt Ltd | 41,186.00 | 2,634.00 | 4,736.00 |
Prabhudas Lilladher Pvt Ltd | 40,710.00 | 2,561.00 | 4,580.00 |
Elara Securities (India) Pvt Ltd | 42,974.00 | 2,143.00 | 4,641.00 |
Average | 41,609.56 | 2,666.22 | 4,786.86 |
On Friday, shares of Exide Industries ended 3.8% down at INR 369.05 on the National Stock Exchange. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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