Mumbai: Exide Industries, India’s top auto and industrial battery maker, witnessed a 76% decline in July-Sept net profit due to a fall in demand, the company said on Thursday, sending its shares down 10%.
“The combination of lower OEM (original equipment manufacturer) offtake together with the lower replacement sales volume has pushed the per unit cost of production and the consequential drop in profit levels,” said a statement from the company.
Lack of growth in telecom, power generation and infrastructure and construction resulted in lower demand for its industrial segment as well, it said.
The firm had also cut product prices 10-12% in September to retain market share, managing director T.V. Ramanathan told newschannel CNBC TV18.
The firm reported a September quarter net profit of Rs 510 million, compared with Rs 212 crore a year ago.
Its net sales rose modestly to Rs 1,175 crore from Rs 1,126 crore.
A Reuters poll of brokerages had forecast a net profit of Rs 148 crore for July-September.
Its shares provisionally closed down 7.8% at Rs 121.15.
Sales volume in the replacent segment did not pick up due to lower demand from auto firms in the aftermath of the 2009 global slowdown, Exide said.
Higher overhead charges on lower sales volumes and firm prices of lead, its key raw material, also hit profitability.
Prices of lead, however, have softened from the third week of September. The positive impact will be felt towards the end of the third quarter, it added.
The firm also said it has test marketed its own range of inverters during the quarter to complement its offering of inverter battery brands.