IDBI Capital

Exide Ind (Hold)

CMP: ₹160.05

Target: ₹163

Exide Industries delivered better than expected quarter on top line, EBITDA and PAT fronts. Revenue/EBITDA/PAT stood at ₹1,910 crore /₹290 crore/ ₹190 crore versus IDBI estimates ₹1,870 crore/₹270 crore/ ₹160 crore. Deviation was led by revenue beat and better cost efficiencies, leading to operational beat. Exide has seen growth in Auto in all three months of Q1 and Industrial has got significant boost from inverter batteries and telecom. While inverter batteries is a seasonal business and will be subdued in Q2/3 (Q1/4 are peak quarters), Telecom segment should continue growing strong according to management. Management reiterated that inverter is a structurally declining business, and its core focus area would be Automotive, which will compensate for decline in inverter business over long term. On ING Life, it invested ₹140 crore in FY14 and does not expect any further material investment. It is not decided on whether to divest or bring in any strategic partner for this business. Key monitorables are sustainability of margin expansion and volume growth across segments.

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