Exide Industries (Q1 FY13)

India Infoline News Service | Mumbai |

We value standalone business at 15x FY14E EPS, and add to it Rs12 for 50% stake in ING Vysya and Rs8 for its subsidiaries.

CMP Rs133, Target Rs142, Upside 6.8% 
  • Total operating income for Q1 FY13 stood at Rs15.5bn, a jump of 24.5% on yoy basis and a growth of 7% sequentially. The sales volumes were higher on back of the continued growth in volumes in the replacement market and a strong performance in the industrial segment. The demand from auto-OEM remained subdued in the quarter. Total volumes for 4-Ws grew by 10%, while the 2-Ws segment witnessed 28% surge. Volumes in the industrial segment reported 19% growth yoy during Q1 FY13. Notably effective from June 1, the company has taken price hikes in the automotive battery segment.
  • OPM at 15% contracted by 285 bps on yoy basis, while sequentially there was an improvement of 33 bps. Net profit for the company declined by 6.9% on yoy basis, while sequentially it was up by 6.7%.
  • The material costs continued to decline on a sequential basis (180 bps down qoq), on back of lower lead prices, but were partly offset by a weaker currency observed in the quarter. The other overheads were higher due to a foreign exchange loss of Rs103mn in the quarter (-70bps impact on OPM) vis-a-vis a gain of Rs61mn in Q4FY12 (+40bps effect on OPM). Notably, excluding the foreign exchange gain/losses, the OPM was at 15.6% as against 14.2% recorded in Q4FY12. 
  • We expect the company to report 15.7% revenue CAGR over FY12-14. On the margin front, we foresee 216bps and 52bps expansion in OPM for FY13 and FY14 respectively. The company has announced a budgeted capital expenditure of Rs2.7bn for FY13. 
  • We value standalone business at 15x FY14E EPS, and add to it Rs12 for 50% stake in ING Vysya and Rs8 for its subsidiaries. We maintain our recommendation of Market Performer and price target of Rs142 for the consolidated entity. 
Results table
(Rs m) Q1 FY13 Q1 FY12 % yoy Q4 FY12 % qoq
Net sales   15,536   12,482   24.5   14,537   6.9
Material costs   (10,114)   (7,941)   27.4   (9,726)   4.0
Personnel costs   (841)   (720)   16.8   (746)   12.7
Other overheads   (2,254)   (1,596)   41.2   (1,935)   16.5
Operating profit   2,328   2,225   4.6   2,130   9.3
OPM (%) 15.0 17.8  (285) bps 14.7  33 bps
Depreciation   (276)   (237)   16.5   (273)   1.3
Interest   (14)   (14)   (4.2)   (14)   - 
Other income   147   308   (52.1)   147   0.5
PBT   2,185   2,282   (4.2)   1,990    9.8
Tax   (665)   (650)   2.4   (565)   17.7
Effective tax rate (%) 30.4 28.5  197 bps 28.4  204 bps
Reported PAT   1,520   1,633   (6.9)   1,425    6.7
Adj. PAT margin (%) 9.8 13.1  (329) bps 9.8  (2) bps
Ann. EPS (Rs) 7.2 7.7   (6.9) 6.7   6.7
Source: Company, India Infoline Research
 
Cost Analysis
As a % of net sales Q1 FY13 Q1 FY12 bps yoy Q4 FY12 bps qoq
Material costs 65.1 63.6 148 66.9 (180)
Personnel Costs 5.4 5.8 (35) 5.1 28
Other overheads 14.5 12.8 172 13.3 119
Total costs 85.0 82.2 285 85.3 (33)
Source: Company, India Infoline Research
 
Financial Summary
Y/e 31 Mar (Rs m) FY11 FY12 FY13E FY14E
Revenues 45,535 49,691 57,885 66,568
yoy growth (%) 20.0 9.1 16.5 15.0
Operating profit 8,787 6,576 8,914 10,598
OPM (%) 19.3 13.2 15.4 15.9
Pre-exceptional PAT 6,194 4,309 5,879 6,906
Reported PAT 6,663 4,309 5,879 6,906
yoy growth (%)
BSE 204.50 [0.30] ([0.15]%)
NSE 204.35 [0.45] ([0.22]%)

***Note: This is a NSE Chart

 

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