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Tuesday, 28 February 2017


Exide Industries Ltd reported stable growth in December quarter FY17. Revenue or Income From Operations, PAT and EBDITA all exhibited positive growth of 12%, 9% and 7% respectively.  Revenue rose 12% YOY and stood at Rs. 19496 Mn compared to Rs. 17381 Mn in the current December quarter.  Sequentially growth rate was negative at 10% dented by demonetization & high competition. Net Profit grew by 9% yearly at Rs. 1515 Mn against Rs. 1385 Mn in the same period previous year but with a quarterly decline of 16% in the current December quarter. EBDITA stood at Rs. 2647 Mn compared to Rs. 2466 Mn in the same period previous year growing by 7% YOY whereas QOQ negative growth was 15% in the current December quarter. Expenditure jumped 15% YOY from Rs. 15389 Mn to Rs. 17721 Mn in the current December quarter. On quarterly basis there was decline of 8% to cope with low revenue growth.  As a result EBDITA margin declined 62 basis points YOY and was reported at 13.57% as operating expenditure growth outpaced revenue in the current December quarter. In addition to basic operating cost, higher interest or Finance costs increased about 700% YOY & depreciation rising by 30% took its toll on the company’s bottom-line in current quarter. Thus Net Profit Margin was reported at 7.79% falling 20 basis points compared to same period previous year. Other Income provided respite rising 84% QOQ and was reported at Rs. 350 Mn compared to Rs. 75 Mn corresponding quarter previous year growing 5 times YOY in current Q3 FY17

Exide’s quarterly numbers have been impacted by sluggish growth in OEM business especially motorcycles due to demonetization in the December quarter. The company is expected to perform well in the coming quarters as demonetization impact wears off and auto sales pick up. The company has witnessed growth in replacement sales of automotive & motorcycle batteries and solar & UPS batteries in the current quarter.

We recommend BUY for the stock for medium & long term investment with PE multiple of 25.33 x FY17E & 22.68 x FY18E at CMP of 213.10. P/BV is seen at 3.48 x FY17E & 3.01   x FY18E with a target price of Rs. 295.

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