The Hindu Business Line : Exide net up 25 pc in Q2 despite forex loss

Kolkata, Oct. 24 An exchange loss of over Rs 8 crore notwithstanding, Exide Industries posted 25 per cent growth in net profit at Rs 78 crore on topline growth of over 30 per cent at Rs 901 crore during the second quarter compared to the corresponding period of the previous year.

The growth rate, however, slowed down when compared with last year.

India’s largest lead-acid battery-maker posted a 42 per cent increase in net profit at Rs 62.24 crore on a topline growth of 48 per cent at Rs 668 crore during the second quarter of 2007-08 compared to 2006-07.

Talking to Business Line, company sources said prime lead prices have seen a meltdown by almost 60 per cent during the last one month and a large part of the benefit will be reflected in the third-quarter performance.

Prime quality lead is currently ruling at around $1,500 a tonne compared to $3,900 a tonne during October 2007. Lead reportedly constitutes 70 per cent of Exide’s raw material cost.

On the other hand, the devaluation of rupee had a bigger impact on the company’s balance sheet during the second quarter. The Indian currency depreciated by eight per cent between July and September 2008 and the free fall continued in October.

Commenting on the outlook for the October-December quarter, company sources said that no major slow down in volume demand was expected except in the heavy commercial vehicle segment.

However, considering that the company has a substantially large exposure in the OE (original equipment) market in both automotive and industrial batteries where prices are directly linked to lead price movement, an impact on the turnover is expected during the current quarter.

Exide controls approximately 60 per cent of India's OE market in automotive batteries. However, the company is not considering any price revision for retail customers of automotive batteries. "The retail market price will depend on the demand-supply scenario," a company official said.

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