Storage battery major Exide Industries today reported a marginal 1.3 per cent decline in net profit at Rs 119 crore in the July-September quarter, against the same period last year.

Sequentially, profits are down 25 per cent compared to the April-June 2013 quarter.

This is despite increasing product prices, almost once in a month throughout last quarter. Prices were increased to keep pace with the sharp devaluation of rupee which had an impact on the company’s raw material (lead) cost.

The last such price increase was effected in early September, when rupee touched nearly Rs 68 (September 3) against dollar.

Market sources say though the Indian currency was quick to bounce back and strengthen at Rs 62-63 in a week, Exide did not reduce product prices.

But, that was clearly not sufficient to arrest the decline in operating and net profit margins, both sequentially and on a year-on-year basis.

Exide’s Managing Director and CEO P. K. Kataky was not available for comments.

“The depreciation of the Indian rupee and continued sluggish demand had its impact on the performance of the company in the second quarter. The demand for both automobile (especially OEM) and industrial batteries (including infrastructure, telecom and inverter) remained subdued,” he was quoted as saying in a press release issued by the company.

Exide caters to nearly two-third of the demand for batteries from Indian auto-makers.

While the OE demand remained sluggish, in the face of declining auto-sales since the beginning of the fiscal, Exide reported a stable growth in replacement demand for automotive batteries in the first quarter.

Yaresh Kothari, analyst, Angel Broking, feels the company “faced headwinds even in the automotive replacement segment” in the last quarter, leading to sharper fall sales than expected. The sales is “significantly lower than our expectations,” he said.

Exide’s shares ended 2.29 per cent lower at Rs 126 on the BSE on Wednesday.

> pratim.bose@thehindu.co.in

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