The Hindu Business Line : Exide Q4 net rises

Growth plans
Exide would spend Rs 80 crore to further raise battery production capacity in fiscal 2007
For fiscal 2007, the company expects a 15-16 per cent volume growth in its automotive business and an 18 per cent growth on the industrial side

MR S.B. GANGULY

Mumbai , April 21

Exide Industries Ltd on Friday reported a 30.34 per cent increase in net profit for 2005-06, to Rs 100.73 crore from the previous corresponding Rs 77.28 crore. The company's net sales gained 17.26 per cent to Rs 1,388.57 crore (Rs 1,184.18 crore for the year ago period). The board has recommended a dividend of Rs 3 per share, i.e. 30 per cent (25 per cent).

For the fourth quarter of financial year 2006, the company had a net profit of Rs 25.89 crore (Rs 18.22 crore) on net sales of Rs 387.70 crore (Rs 310.96 crore).

Lead price impact

Rising lead prices made the just ended fiscal a tough one, Mr S.B. Ganguly, Chairman & CEO, said at a press briefing. Prices had touched $1,200 per tonne and continue to be 45-50 per cent higher year on year at $1,070-1,080. Exide requires 80,000 tonnes of lead per annum, a large portion of that, imported. Its fiscal 2006 raw material expenses had moved up by 16.77 per cent to Rs 793.48 crore (Rs 679.50 crore).

The company revised automotive battery prices upward on two occasions last year, by 5 per cent and 6 per cent, and that of industrial batteries by 8 per cent on the average. Senior officials said the retail price correction was insufficient to pass on added costs. The company had to reduce manufacturing costs, enhance productivity and increase volumes to compensate. Lead prices have begun stabilising but remain a matter of concern.

To raise output capacity

Exide would spend Rs 80 crore to further raise battery production capacity in fiscal 2007 including hike on the automotive side from 4.8 million units to 6 million units, that of two-wheelers from 6 million to 8 million units and in industrial, from 800 million ampere hours to 1,000 million ampere hours. For fiscal 2007, the company expects a 15-16 per cent volume growth in its automotive business and an 18 per cent growth on the industrial side. In unaudited consolidated results disclosed to the BSE, Exide's fiscal 2006 net profit slid to Rs 72.17 crore (Rs 79.50 crore) even as total income (net of excise, VAT and sales tax) rose to Rs 1,486.63 crore (Rs 1,272.44 crore). Mr Ganguly attributed the profit dip to the 50 per cent equity stake Exide acquired in ING Vysya Life Insurance Company Private Ltd, which required the battery maker to share the insurer's losses.

He made it clear that Exide's borrowings — at Rs 290 crore last fiscal — won't be fuelled by the insurer's appetite for capital. On the BSE on Friday, the Exide stock closed lower by 0.73 per cent at Rs 284.10.