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Our Bureau

Kolkata , Jan. 6

RISING lead prices may have a telling effect on the profitability of Exide Industries this fiscal, and in order to beat the pressure on margins the company is stressing on volumes and cost-cutting exercises.

Talking to newspersons here today after the extraordinary general meeting, the company's Chairman, Mr S.B. Ganguly, said that lead prices have gone up by 56 per cent during April-December, 2004. Lead constitutes 70 per cent of the total cost for manufacturing batteries.

While the battery industry has already sought reduction of import duty on lead to five per cent, from the prevailing 15 per cent, Mr Ganguly made it clear that the volatility in lead prices has had its due effect on the company's margins.

On Exide's plan to set up lead smelter joint venture in India, he hinted that out of the three overseas parties which shown interest in the project, discussions have progressed with a Russian company. "Negotiations have progressed with a Russian company which has shown keen interest in the project, even though we have differences on some technological issues."

Earlier, at the EGM, shareholders cleared the proposal to allot 37,79,342 fresh equity shares of Rs 10 each at a price of Rs 153 per share to a FII, Aranda Investments (Mauritius) Pte.

"The fresh equity is expected to raise the float of the company's shares in the secondary market, thereby giving it better liquidity in the long term."

A total of Rs 57.82 crore received through the preferential allotment will go towards part-financing the long-term fund requirements of Exide Industries.

Mr Ganguly said that the company did not suffer any loss of property in the country or in other South-East Asian countries where it has production hubs, during the recent Tsunami natural disaster. However, four employees of Exide's Sri Lanka facility are still reported missing.

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