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Exide July-Sept net up on higher sales

Exide July-Sept net up on higher sales
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First Published: Tue, Oct 12 2010. 03 11 PM IST
Updated: Tue, Oct 12 2010. 03 11 PM IST
Reuters
Mumbai: Exide Industries Ltd on Tuesday reported a 43% rise in July-Sept net profit helped by higher sales and a one-time gain, but said supplies to the higher margin replacement market were under stress due to huge demand from original equipment manufacturers (OEM).
The company, India’s largest auto and industrial battery maker, reported a net profit of Rs 213 crore in the quarter compared with Rs 149 crore in the same period last year. Net sales rose to Rs 1,126 crore from 950 crore.
The profit included a one-time gain of Rs 469.3 million related to transfer of a leasehold land no longer in use.
“The company has a one-time gain...because of which we are seeing the bottomline go up. If we adjust to this number, the net profit would be close to 166 crores (Rs 166 crore),” said Vaishali Jajoo, auto analyst at Angel Broking.
Exide’s quarterly EBITDA margins has dropped to around 21.8% from 26% a year ago, Jajoo said.
“In the recent past, we faced some challenging times trying to keep pace with the sudden and unprecedented rise in demand in the automobile sector, mainly for motorcycle batteries,” Exide said in a statement.
“In addition, the inadequate production capacity for four-wheeler batteries also restricted the volume available for more profitable replacement trade segment,” it said.
As a result, Exide had to earmark “a significant portion” of its production volume to OEMs at the cost of reduced supplies in the more profitable replacement market, it said.
During the quarter ended 30 September, Exide commissioned its third motorcycle battery plant in Ahmednagar in Maharashtra. It has also set up additional production lines for four-wheeler batteries at two other sites in September.
“The availability for replacement segment will improve significantly in the near term which augurs well for the rest of the financial year,” Exide added.
Exide, which plans to invest up to Rs 400 crore this fiscal to augment capacity, is also bringing down input costs as it acquired the remaining 49% in its Bangalore smelting unit Leadage Alloys India Ltd during the quarter.
The company had acquired lead smelting and refining units in Pune and Bangalore to source lead, which constitutes about 70% of the material cost of a battery.
At 3:23pm., Exide shares were down 3.57% at Rs 171.65 in a weak Mumbai market.
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First Published: Tue, Oct 12 2010. 03 11 PM IST