Exide Industries - Q4FY13 Result Review - Angel Broking

For 4QFY2013, Exide Industries' (EXID) operating performance was slightly ahead of our estimates led by expansion in EBITDA margins on account of the sustained momentum in the four-wheeler (4W) replacement battery segment. The top-line for the quarter grew broadly in-line with our estimates and stood at Rs. 1,541cr (6% yoy and 5.3% qoq) led by continued traction in the 4W replacement battery segment. However, sluggish demand in the 4W and 2W OEM battery segments restricted further growth in the top-line. The growth in the industrial battery segment too remained healthy led by pick-up in the home UPS battery segment.

On the operating front, EBITDA margins improved sharply by ~200bp qoq to 13.3%, which was slightly ahead of our estimates of 12.5%. The margin expansion was carried out purely due to the decline in other expenditure (7% qoq). As a percentage of sales, other expenditure declined 190bp sequentially. The raw-material and staff cost as percentage of sales however remained stable on a sequential basis. Consequently, net profit surged 40.7% qoq (2.8% yoy) to Rs. 146cr as against our estimates of Rs. 126cr. The net profit also benefitted from a sharp jump of 148.8% qoq (105.9% yoy) in other income to Rs. 30cr.

We shall revise our estimates and release a detailed result note post our interaction with the management during the earnings conference call. At Rs. 135 the stock is trading at 15.2x FY2015 earnings. Currently, we maintain our Accumulate rating on the stock with a target price of Rs. 146.

Source : Equity Bulls

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