Exide Industries Q3 results: Profit rises 5% to ₹258 cr on battery demand

Indian battery maker Exide Industries reported a 5 per cent rise in third-quarter profit on Friday, as the country's recent ‍tax cuts fanned an ​increase in sales to automakers, but growth was partly offset by weaker exports.

Shares of the company were up about 0.7 per cent, little changed from before the results were announced.  The results reflect a broader recent trend of Indian auto and component makers seeing a revival in demand ​after the country implemented tax cuts on a wide range of goods in late September that made vehicles and their parts cheaper.

Lower tax rates boosted sales of vehicles by 18 per cent in the third quarter, industry data showed.

 

The tax rate on batteries, which was earlier 28 per cent, was reduced to 18 per cent.  Exide, like most parts makers, generates most of its revenues from retail customers. Vehicle battery sales to customers replacing older units was a key growth driver, analysts said.

The company, which also sells uninterrupted power supply units, gets three-fourths of its revenue from retail, or non-institutional customers. Direct sales to automakers and industrial clients form the ‌remaining one-fourth of revenue.

Revenue from sales to ​automakers jumped 25 per cent during the quarter, while sales of two- and four-wheeler batteries to retail customers hit a record high, Exide said.

Exports, however, remained weak due "tariff linked challenges", capping profit and revenue growth.

The company reported a standalone profit after tax of ₹258 crore ($28.1 million) for the October-December period, up from ₹245 ‍ crore a year ​before.

Quarterly revenue grew about 5 per cent to ₹4,030 crore.

Expenses for the period rose 4.5 per cent, led higher by a nearly ‍14 per cent ‍jump in raw ‌material costs.