Exide Industries (EIL) reported a healthy operational performance in Q1FY21 with limited topline fall primarily tracking healthy aftermarket/ replacement demand in automobile, UPS segment amid muted OEM prints. Net sales for Q1 were at Rs. 1,548 crore, down 44% YoY. EBITDA for the quarter was at Rs. 148 crore (down 63.6% YoY, 45.1% QoQ) with corresponding EBITDA margins at 9.6%, down 356 bps QoQ. Gross margins declined 695 bps QoQ primarily due to higher use of finished goods inventory. Other expenses as percentage of sales came down by 471 bps and limited the margin damage. Consequent PAT in Q1FY21 came in at Rs. 44 crore, down 80.4% YoY.
Valuation & Outlook
We are constructive on EIL given its exposure to steady replacement market demand, healthy B/S parameters as well as its industry leading work on new technologies in the battery space. Hence, we upgrade EIL to BUY, valuing it at Rs. 180 (SOTP basis), (battery business at Rs. 135 i.e. 15x P/E on FY22E EPS of Rs. 8.9; Rs. 45 for insurance business & smelting operations).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_ExideInds_Q1FY21.pdf
Shares of EXIDE INDUSTRIES LTD. was last trading in BSE at Rs.154.5 as compared to the previous close of Rs. 155.65. The total number of shares traded during the day was 249206 in over 2133 trades.
The stock hit an intraday high of Rs. 158.75 and intraday low of 153.75. The net turnover during the day was Rs. 39010727.