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The country’s largest automotive battery maker Exide Industries is pinning hopes on an ‘industry friendly’ budget, for demand recovery in the January-March 2016 quarter.
“I expect growth in the fourth quarter,” PK Kakaty, Managing Director and CEO, told BusinessLine . Asked if it was wishful thinking or based on some fundamentals, he said: “Perhaps they will place an industry friendly budget”.
After a flattish performance in the March 2015 quarter, Exide reported sharp decline in both net sales and profit in June this year. The decline was a sharper, 16 per cent in net profit in the face of severe demand slow down in both automotive and industrial battery segments. The only saving grace was “encouraging growth in replacement sales of automotive batteries.”
A robust growth in replacement sales — that fetches higher margin than OE (original equipment) supplies to car makers — was offering the much-needed support to Exide’s balance sheet for the last couple of quarters.
Kataky confirms that there is no improvement in demand outlook for OE and industrial segments. Demand for batteries used in tractors has not picked up either. As an added concern, the replacement demand has “toned down”.
“There is a mild correction in replacement demand for automotive batteries,” he said.
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