Exide Industries dips post June quarter results

In past three-months, the stock had rallied 34%, as compared to 7.5% rise in Sensex till Monday.

Exide Industries was trading 3% lower at Rs 173 on the BSE on profit booking after the company reported 24.5% year-on-year (YoY) jump in net profit at Rs 193 crore for the quarter ended June 30, 2016 (Q1FY17), on back of double digit growth in operational income. The stock had gained over 10% in the past one month ahead of its earnings annoucement. The battery maker had registered a profit of Rs 155 crore in the same quarter previous year.

Net sales of the company during the quarter under review grew 11% at Rs 2,008 crore against Rs 1,806 crore in the corresponding quarter of previous year. The company’s earnings before interest tax depreciation and amortization (ebitda) grew 19% YoY to Rs 315 crore with margins increasing 100 basis points YoY to 15.7%.

Mr G Chatterjee, managing director & chief executive officer, said that demand for both automotive and industrial battery has shown improvement during the quarter. The company is focusing on cost control and technology upgradation to improve profit.

In past three-months, the stock had outperformed the market by surging 34%, as compared to 7.5% rise in the S&P BSE Sensex till Monday, July 18, 2016.

Analysts at Elara Securities see Exide's over dependence on inverter battery sales for revenue growth as a threat once Amara Raja ramps up capacities of tubular plant.

“Pricing premium in auto replacement segment vs Amara Raja is also expected to converge, limiting scope of margin expansion. The recent sharp increase in the stock price is also attributable to the expectation of sale of its insurance business,” the brokerage firm said in a results update.

At 10:20 AM, the stock was down 2.4% at Rs 175 on the BSE. A combined 3.29 million shares changed hands on the counter on the BSE and NSE so far.