Demand recovery pushes Exide net profit up by 5 per cent

Exide Industries registered a five per cent growth in standalone net profit at ₹246 crore for the quarter ended September 30, against ₹234 crore in the same period last year.

Revenue from operations on standalone basis increased by nearly 13 per cent to ₹3,719 crore during the quarter under review compared with ₹3,290 crore in the same period last year.

Demand scenario was upbeat, both in the replacement market and with the OEMs, thereby driving volumes in Q2FY23. Improvement in semi-conductor supply situation led to demand recovery from OEMs, the company said in a press statement.

The industrial vertical witnessed strong recovery compared to previous year, driven by pick-up in business activity.

“Sales growth of 13 per cent and 32 per cent, respectively, during second quarter and first half of the year is driven by uptick in volumes and our judicious pricing strategies across verticals. From the current quarter onwards, our profitability margins have also started recovering compared to the immediate previous quarter. Easing of unprecedented inflationary pressures in input costs and benefits of the cost optimisation strategies have contributed to margin increase. We expect buoyant demand scenario to remain in the medium-term across most verticals and margin recovery to be supported by respite in input costs to some extent,” Subir Chakraborty, MD & CEO, said in the statement.

High input costs continue to impact profits on a year-on-year basis. However, EBITDA margin increased to 11 per cent in Q2FY23 compared with around 10 per cent in Q1FY23. Similarly, PBT increased to around 9 per cent in Q2FY23 against 8 per cent in Q1FY23.

“Our effective cost optimisation initiatives continue to lower fixed costs. Total fixed expenses (employee costs and other expenses) were 19 per cent and around 19 per cent of sales in Q2FY23 and H1FY23 (down from 20.2 per cent in Q2FY22 and 20.5 per cent in H1FY22). We maintain our track record of generating high cashflows and a comfortable balance sheet with zero debt,” it said.

Exide Energy Solutions Ltd, the wholly owned subsidiary company, conducted the Bhoomi Poojan ceremony of its lithium-ion cell manufacturing facility in Bengaluru this September.

Exide Leclanche Energy Private Ltd, the JV subsidiary company (‘ELEPL’), through a buy-back scheme, bought back the entire paid-up and issued equity shares held by “Leclanche S.A.” (‘LSA’) this month. As a result of this buy-back, ELEPL is now a 100 per cent subsidiary of Exide Industries.