EXIDE 1QFY22 - first cut - Weak margins drag PAT - Not rated - YES Securities

- Revenues declined 15.4% QoQ to Rs24.9b (cons Rs24b) due to lockdown impact in replacement and OEM sales.

- Gross margins contracted 280bp QoQ (+30bp YoY) to 31.5% led by lead inflation in Q1 (+16% QoQ/ +28% YoY at Rs157/kg) and weak mix. Lead prices further increased to Rs173/kg (+10% v/s Q1FY21 avg).

- Consequently, EBITDA declined 37% QoQ to Rs2.6b (cons Rs3b) with margins at 10.5% (-350bp QoQ, cons 11.6%).

- Weak op. performance and higher depreciation at Rs1b (v/s Rs974m) dented adj.PAT at Rs1.25b (cons Rs1.6b, -49% QoQ).

- View - EXIDE's margins remained steady in the band of 13.3-13.8% in last 4 years despite healthy replacement sales benefitting mix, increased captive sourcing and new launches. Margins trajectory going forward too likely remain similar due to increased competition from organized and unorganized segments resulting in moderate earnings growth. This reflects in EXID's valuation which is trading cheap at 15x FY23 bloom cons EPS. Not Rated.

Shares of Exide Industries Ltd., was last trading in BSE at Rs. 176 as compared to the previous close of Rs. 178.55. The total number of shares traded during the day was 231947 in over 3815 trades.

The stock hit an intraday high of Rs. 180.3 and intraday low of 175.65. The net turnover during the day was Rs. 41068877.

Source : Equity Bulls

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