Mumbai: Exide Industries , India’s largest auto and industrial battery maker, on Wednesday reported flat first quarter numbers that fell short of expectations, said it had seen slower demand for automobile batteries and inverters.
The company has reported a quarterly net profit of Rs 163 crore compared with Rs 165 crore a year ago. Net sales rose about 8% to Rs 1,240 crore.
A Reuters poll of brokerages had forecast a net profit of Rs 180 crore on sales of Rs 1,360 crore.
“The demand growth that was seen in the country’s automotive industry over the last several quarters has not been sustained, resulting in lower OE (original equipment) demand,” T.V. Ramanathan, managing director, said in a statement.
Indian car sales, which grew at a breakneck 30% in the fiscal year that ended in April, are now expected to grow by just 10% to 12% in FY12, down from an earlier forecast of 16% to 18%, industry group the Society of Indian Automobile Manufacturers forecast.
Car sales in Asia’s third largest economy, which in June saw their slowest pace of growth since March 2009, are driven by a burgeoning middle class that relies on bank loans for purchases.
But India’s central bank has raised interest rates 10 times since March last year in an effort to battle stubbornly high inflation, a move that has hurt credit-based purchases.
The growth of the Indian auto component industry is directly linked to the auto sector’s growth and with OEMs accounting for more than 70% of domestic sales.
“The prevalent power supply situation and pleasant weather conditions in the north Indian markets also resulted in a lower inverter battery sales during the quarter,” Ramanathan said.
Lead costs increased 21% on year but the demand contraction reduced Exide’s ability to pass on the costs in full, he added.
He said the setbacks were short term “and there is no reason to worry about the longer term growth prospects of the company”.
Exide has budgeted a capex of Rs 370 crore this fiscal year to enhance capacity across its plants.