Exide reported weaker than expected profitability for Q2FY19. While its top-line was in line with our estimates, EBITDA was 20.3% below our forecast. Net sales were in line with our expectations at Rs27 bn (+15.3% YoY, -1.9% QoQ). Automotive, motorcycle, inverter and industrial batteries volumes showed good volume growth. However, EBITDA margin contracted 194bps QoQ 12.2% due to higher fuel costs and INR depreciation against the US$. The company reported exceptional gain of Rs1,083 mn on account of gain on sale of property. Excluding this gain, adjusted net profit was 32.3% below our estimates at Rs1,601 mn....