Exide Industries Ltd. share price target

Topline seen consolidating, margins to track muted lead prices! The duopolistic domestic battery market in the automotive segment realises demand from OEMs and aftermarket typically in ~40:60 ratio. The auto OEM space is currently in the grip of a slowdown given poor consumer sentiment and liquidity troubles. Hence, volume growth at ancillary players such as battery manufacturers would largely depend on aftermarket demand. The same is expected to be healthy given strong OEM sales over FY16-18. Simultaneously, margins at battery players including Exide are expected to...

Exide's Q1FY20 results were ahead of our estimates. The net revenue was ` 27.8bn (+0.2% YoY on a high base) (vs estimate of ` 25bn), as the increase in revenue from the automotive replacement and industrial segments, was offset by fall in lead prices and weak OEMs sales. The EBITDA was ` 4bn (+4.3% YoY), with expanded margin at 14.7% (+57bps YoY/+31bps QoQ) due to a decline in lead prices, a better product mix, and cost control measures. The APAT grew 7% YoY to ` 2.25bn in Q1FY20. We expect Exide to benefit from: 1) further improvement in the...

lithium-ion solutions by Q3FY20 would address concerns on its readiness pertaining to mobility landscape changes. We believe that healthy growth momentum in auto replacement, industrial and exports segments would help contain weak OEM demand. We maintain Accumulate with a price target of Rs231, based on 19xMar'21E standalone EPS plus Rs30 for value of...

Wide- ranging reforms such as Make in India, Digital India and Smart cities, among others. Implementation of GST, accelerating demand shift from unorganized to organized players....

Exide Industries Limited (EIL) is a leader in storage battery business with a market share of 60% in India. Its segment includes automotive and industrial lead acid batteries. Revenue for the Q4FY19 grew by 6%YoY, in line with our...

Exide reported better than expected profitability for Q4FY19. Its net sales was in line with our forecast at Rs 25,987 mn while EBITDA was above our forecast by 12.1% at Rs 3,733mn (+19.4%QoQ, +10.4% YoY) benefiting from lower lead prices. EBITDA margin expanded 185bps QoQ and 62bps YoY to 14.4%, beating our forecast by 135bps. EBITDA margins benefited from falling lead prices (-10.0% YoY in Q4FY19 in INR terms) and better price realization. Further, net profit saw a strong growth of 35.9% QoQ to Rs 2,107mn aided by higher other income which increased by 107.8% QoQ to Rs 166mn. We raise our margin estimates for FY20 given better than expected cost performance in...

Steady replacement market to ensure healthy volume growth! The domestic battery market is a duopoly in nature with Exide and Amara Raja cornering lion's share of market. Typically in the battery segment, in the auto space which forms bulk of sales (~80%), the battery players realise ~40-50% of battery demand from auto OEMs and the rest i.e. ~50-60% from the replacement market. Given the life of battery that is typically ~4 years, battery players realise steady replacement demand growth amounting to ~10% which will help them traverse the challenging times at auto OEMs...

Exide Industries' Q4FY19 operating performance surpassed our estimates, Change in Estimates | Target | Reco wherein operating margins stood at 14.4%, up 70bps YoY / 190bps QoQ, against PLe of 13.5%. With lead prices lower ~20% YoY (down ~3% QoQ),...

Exide's 4QFY19 results were ahead of our estimates. The net revenue was ` 26bn (+6% YoY), due to higher automotive (especially from the replacement segment) and industrial battery sales. The EBITDA was ` 3.73bn (+10%YoY) with expanded margin at 14.4% (+62bps YoY), due to a...

EIL will be the direct beneficiary from any structural change in the auto demand owing to its leadership position having 60% market share in the automotive battery and 86% market share in 2W Looking ahead, expect the demand scenario for 2W to remain robust in next couple of years led by increased rural income, higher MSP and new product launches by OEMs. Company is well poised for cyclical uptick in OEM within automotives and inverters and telecom segment within industrial batteries. With an enriched portfolio, consistent focus on innovation, operational efficiencies, distribution network & service delivery, EXIDE is...