Exide Industries, the country’s largest lead-acid battery maker, is thinking about again raising prices to make up for the effect of the depreciating rupee. The Rs 6,000-crore-worth battery maker had raised prices by five per cent each in April and July.

“We will increase prices,” said P.K. Kataky, CEO and Managing Director, speaking to Business Line . The quantum of price hike was yet to be decided.

The last increase accommodated currency fluctuation up to Rs 61 a dollar. The Kolkata-headquartered company caters to two-third of the battery requirement of automobile manufacturers in India and is the single largest player in the automotive and industrial battery segments.

Lead accounts for nearly 70 per cent of the company’s raw material cost. And, two-thirds of the lead requirement is imported. With imports getting costlier the price of local lead has also been rising.

Capex impact

The rupee’s decline has also impacted Exide’s capital expenditure plans for the year.

The company had planned investments to the tune of Rs 280 crore this fiscal. They included financing the ongoing capacity expansion of its Chinchawad (near Pune) facility, estimated to cost Rs 70 crore. Another Rs 210 crore was to be invested in maintenance and upgradation of existing facilities.

According to Kataky, the capex plan was drawn up with an exchange ratio of Rs 54 a dollar. However, the sharp depreciation of the rupee in the last two months, and the resulting inflationary impact, has inflated the estimated cost of projects by Rs 50 crore. “We are yet to decide if we should cut back our expenditure plan,” he said.

Slowdown blues

On the demand side, Exide says that there are few positives for the automotive and industrial battery segments.

“The OE demand (from automobile makers) was bad in July. And, the indications are no better for August ,” said Kataky.

Amara Raja Batteries Ltd, the second largest battery maker, was noncommittal on plans to increase prices.

K. Suresh, the company’s Chief Financial Officer, said: “We are also observing the currency volatility and its impact on project costs and profitability. The focus will be on minimising the adverse impact through appropriate actions.”

(With inputs from V. Rishikumar, in Hyderabad)