(Reuters) -Indian battery maker Exide Industries posted a smaller-than-expected quarterly profit on Wednesday, hurt by high raw material prices and sluggish automotive demand.
The company’s standalone profit after tax fell 10.3% year-on-year to 2.55 billion rupees ($30.1 million) for the three months ended March 31. Analysts, on average, expected a profit of 2.8 billion rupees, as per data compiled by LSEG.
Revenue from operations rose 3.7% to 41.59 billion rupees, slowing from a 13.2% increase a year earlier, while total expenses jumped 5.6%.
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KEY CONTEXT
Exide gets about 69% of its revenue from the automotive segment, according to its latest annual report.
Sales of passenger vehicles increased 2.4% in the quarter, compared to a 11.5% increase a year earlier. Two-wheeler sales grew a mere 1.4%, sharply lower than the 24.9% jump reported a year ago.
Exide’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margins fell to 11.2% from 12.9% a year earlier, pressured by higher raw material costs.
“Prices of raw materials such as antimony, have significantly increased in last 6 months,” the company said.
Analysts also flagged weak replacement demand for old or worn out batteries, which could weigh on the topline of battery makers.
Exide is the first among its peers to report fourth-quarter earnings.
PEER COMPARISON
Valuation (next 12 Estimates (next 12 Analysts’ sentiment
months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
Exide Industries 23.97 14.07 8.45 12.64 Hold 14 0.89 0.54
Amara Raja Energy & 16.74 8.87 8.96 11.92 Hold 10 0.75 1.05
Mobility
Bosch 37.04 30.72 10.98 13.65 Hold 4 1.00 1.29
* The mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JANUARY-MARCH STOCK PERFORMANCE
— All data from LSEG
— $1 = 84.6175 Indian rupees
(Reporting by Meenakshi Maidas in Bengaluru; Editing by Sherry Jacob-Phillips and Sonia Cheema)
