Weak market conditions notwithstanding, the lead-acid battery major Exide Industries on Wednesday reported nearly 24 per cent rise in net profit in July-September quarter, riding primarily on decline in raw material costs.
The company has also announced an interim dividend of ₹1.60 on shares of ₹1 face value each.
Exide’s net profit went up to ₹156 crore during the last quarter from nearly ₹126 crore in the corresponding period last year. The higher profits came against a marginal decline in net sales from approximately ₹1,760 crore to ₹1,736 crore.
The profits were clearly attributed by nearly 24 per cent decline in raw material cost from ₹1,007 crore. The mammoth ₹315 crore savings on raw material cost came on the back of steady decline in lead prices over the last six months.
Lead is the primary raw material to manufacture lead-acid batteries that has both automotive and industrial applications. The base metal price was consistently on the decline since the beginning of this fiscal and touched 52-week low this month.
PK Kataky Managing Director and CEO admitted the positive impacts of decline in raw material cost. According to him, efforts of the management over the years towards cost reduction have started bearing fruit. This, “along with softer lead price have led to significant improvement in EBIDTA (earnings before interest, taxes, depreciation and amortization) margin in the September quarter,” he said in a company release.