Exide Industries hits 52-wk low; down 28% in two months on weak Q3 results

The stock hit a 52-week low of Rs 195, down 5 per cent on the BSE in intra-day trade on Wednesday in an otherwise firm market.

Shares of Exide Industries hit a 52-week low of Rs 195 apiece, down 5 per cent on the BSE in intra-day trade in an otherwise firm market. In the past two months, the stock of auto ancillary company slipped 28 per cent on reporting weak December 2018 results (Q3FY19). In comparison, the S&P BSE Sensex was down 2.3 per cent during the same period.

In Q3FY19, Exide Industries reported flat net profit at Rs 155 crore, due to lower other income and higher tax rate. It had a profit of Rs 154 crore in the year-ago quarter. Operational revenue grew 9.6 per cent at Rs 2,497 crore against Rs 2,278 crore against the corresponding quarter of the previous year. The lower revenue growth during the quarter was owing to sluggish growth in automotive original equipment manufacturer (OEM), inverter and industrial segments.

Ebitda (earnings before interest, taxation, depreciation and amortisation) margin improved marginally 11bps at 12.5 per cent against 12.4 per cent in the previous year quarter. Margin improvement was limited primarily due to higher other expenses.

Exide Industries is a leading battery player in the domestic market, which is largely a duopoly in nature. The company has a greater share of OEM sales, thereby impacting its performance in Q3FY19 as well, going forward, in Q4FY19 given large base at the OEM level, according to analysts at ICICI Securities.

The domestic auto segment is witnessing demand pressure with 9MFY19, 2-wheeler volume growth at 9.6 per cent vs. around 12% expected at the start of year and 4-wheeler growth at 4.4% vs. around 8- 10 per cent growth envisaged earlier. Going forward, management commentary at key OEMs is also cautiously optimistic for FY20E given the headwinds with 4-W industry to grow at around 7-8% and 2-W industry growth pegged at around 8-10%. We believe this will limit the growth prospects, the brokerage firm said in result update.

Motilal Oswal Securities cut FY20/21 EPS by 6 per cent/7 per cent to factor in lower volumes in the automotive OEM segment, particularly in FY21, due to the pre-buying impact of BS6 and higher other expenses.

At 11:30 am; Exide Industries was trading 3 per cent lower at Rs 200 on the BSE, against 0.65 per cent rise in the S&P BSE Sensex. The trading volumes on the counter nearly doubled with a combined 4.9 million equity shares changed hands on the BSE and NSE so far.