Exide Industries Ltd. share price target

As per the management, the volume growth in Automotive and Motorcycle batteries remained strong whereas in UPS, Telecom and Solar batteries as well as in other infrastructure segments were good during the quarter. The company is focusing on cost...

Maintain Buy with revised SOTP-based TP of Rs 304, based on 20x FY20E EPS + 2x Inv (Rs 37) for the insurance business stake. Exides 1QFY19 revenue and EBIDTA number were 8/7% ahead of our estimates. Net revenue at Rs 27.72bn (+32% YoY,) led by strong traction in automotive and industrial batteries sales. EBITDA at Rs 3.91bn (+21%YoY) with margin at 14.1%(-120bpsYoY/+36 bps QoQ) impacted by higher lead cost (+16% YoY). APAT stood at Rs 2.10bn (+11%YoY), impacted by higher depreciation and lower other income.

ICICI Securities Ltd | Retail Equity Research Exide Industries' (EIL) revenues grew 31.8% YoY to | 2,772 crore vs. our estimate of | 2,457 crore. EIL's automotive battery volumes remained strong while growth in the UPS, telecom, solar as well as other infrastructure space continued to be good during the quarter EBITDA margins contracted 132 bps YoY but expanded 36 bps QoQ to 14.1% vs. our estimate of 14.4%. Higher raw material cost (average lead price for Q1FY19 increased 14.8% YoY to | 160/kg)...

We attended Exide Industries' (EXID) AGM, where management highlighted its initiatives on technologies like Bi-polar batteries and Ultra batteries, which would provide competitive advantage for the company. Management also revealed its FY19 capex plan of ~INR11b, of which INR8b would be incurred on capacity expansion. Further, EXID's FY18 annual report details the initiatives and the likely focus areas that could further strengthen its leadership.

1 August 2018 Net sales grew 31.8% YoY (and 12.7% QoQ) to INR27.7b, driven by growth in Automotive, UPS, Inverter, Telecom, Solar and Infrastructure batteries. Our channel check suggests that the company has taken cumulative price increase of 1-1.5% during the quarter, which also aided revenue growth. Average spot lead price for 1QFY19 declined 1.4% QoQ (but increased 15% YoY) to INR160 per kg. In July 2018, lead prices declined 4.5% v/s 1QFY19 average (+4% YoY) YoY (and 120bp QoQ) to 33.6%, led by higher lead prices and likely lag in lead inflation pass-through. The management indicated that lead inflation coupled with adverse currency movement impacted margins in 1QFY19. Higher RM cost was offset by operating leverage benefits, as staff cost declined 100bp YoY (and 50bp QoQ) to 5.8%. Other expense too declined by 120bp YoY and QoQ to 13.

Revenue increased by 7.95% to Rs. 2459.41 Cr in Q4FY18 when compared to the previous quarter. Exide Industries Ltd results Comment

As per the management, the volume growth in Automotive, Motorcycle, Inverter, UPS, Telecom and Solar batteries as well as in other infrastructure segments were strong during the fourth quarter. The company is focusing on cost control and technology upgradation strategies to improve bottom-line. Lead prices have corrected ~15% from the peaks seen in end January/start of February 2018 which should aid margins in the coming quarters. We believe Exide is likely to be a key beneficiary of GST implementation in India and...

EBITDA margin was 21bps ahead of our forecast at 13.7% (+67bps YoY, +134bps QoQ) indicating price hikes were more than offset higher raw material costs. EBITDA at Rs3.4 bn (+31.1% YoY, 19.6% QoQ) was 6.0% ahead of our estimate. We raise our revenues and margin estimates slightly for FY19/20 to account for slightly higher volume growth and fall in lead prices. However, given the recent run-up in the stock price, we downgrade the stock to an Accumulate. Key Highlights and Investment Rationale EBITDA margins improve: EBITDA margin improved 67bps YoY and 134bps QoQ to...

Maintain Buy with revised SOTP-based TP of Rs 298, based on 20x FY20E EPS + 2x Inv (Rs 37) for the insurance business stake Exides 4QFY18 Revenue, EBIDTA and PAT were 7/11/11% ahead of our estimates. Net revenue at Rs 24.6bn (+26% YoY,) reflects strong traction in automotive and industrial batteries sales. EBITDA at Rs 3.38bn (+34% YoY) with margin at 13.7% (+86bpsYoY/133bpsQoQ), beat estimates led by higher operating leverage. APAT stood at Rs 1.89bn (+16% YoY), impacted by higher depreciation and lower other income (-34% QoQ).

ICICI Securities Ltd | Retail Equity Research Exide Industries' (EIL) revenues increased 24.5% YoY to | 2,459 crore vs. our estimate of | 2,506 crore. According to the management, battery volumes across segments (4-W, 2-W, inverter, UPS, telecom and solar batteries) were strong during the quarter EBITDA margins expanded 49 bps YoY & 133 bps QoQ to 13.7% vs. estimate of 12.9%. Higher raw material cost (average lead price in Q4FY18 increased 6% YoY to | 162/kg) resulted in gross margin...