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Exide Industries profits rise, buoys shares

Exide Industries profits rise, buoys shares
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First Published: Mon, Apr 27 2009. 03 15 PM IST
Updated: Mon, Apr 27 2009. 03 15 PM IST
Mumbai: Auto and industrial battery maker Exide Industries Ltd’s fourth quarter profit rose 9%, meeting forecasts on growth in the replacement market and industrial battery segment.
Shares in the company rose to a high of Rs57.45 after the results before easing a little to Rs54.60, still up 3.4% in a volatile Mumbai market.
The company posted January-March net profit of Rs682 million compared with Rs628.2 million a year ago. Net sales rose to Rs7.98 billion compared with Rs7.91 billion.
A Reuters poll of brokerages had forecast net profit of Rs679.33 rupees on sales of Rs7.81 billion.
A robust volume growth in the high-margin after sales segment more than offset a slowdown in its automotive segment over the past two quarters, the company said in a statement.
It gets 65% of its revenues from the replacement market.
Besides, certain verticals of its industrial battery segment such as inverters and telecommunications performed “exceptionally well” during the year, boosting revenues and profits, it said.
Exide gets 35% of its revenues from industrial batteries.
Its net profit for the year ended 31 March rose 14% to Rs2.84 billion.
But falling lead prices, its key raw material, did not help the firm as the rupee weakened in tandem.
Exide imports half of its lead requirement and hence the depreciation would act as an adverse factor, Angel Broking analyst Vaishali Jajoo said.
“We weathered the storm through enhanced focus on production efficiencies, better inventory management...and cost cutting across all functions,” chief executive TV Ramanathan said in the statement.
Exide acquired 51% in a lead smelter, Leadage Alloys India Ltd, and 100% in Tandon Metals Ltd over the past two years to access recycled raw materials and cut dependence on high-cost imported lead.
The two smelters currently account for 28% of Exide’s total lead and lead alloy requirements.
During the year the company’s capital expenditure stood at Rs1.6 billion, it said.
In July last year, Exide had said it was investing Rs1.8 billion to raise capacity in FY09.
Its debt to equity ratio as of March-end stood at 0.26 to 1.
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First Published: Mon, Apr 27 2009. 03 15 PM IST