The Hindu Business Line : Exide Industries posts marginal growth in net

Kolkata, Jan. 12 India’s largest storage lead acid battery manufacturer, Exide Industries, managed to post a marginal two per cent growth in net profit to Rs 56 crore during the October-December quarter. This is irrespective of the 30 per cent drop in OE (original equipment) demand from the automakers during the quarter.

Approving the results for the quarter, the Exide board on Monday announced a 40 per cent interim dividend to the company’s shareholders. Senior company officials told Business Line that OE demand from automakers were expected to improve during the January-March 2009 quarter, thereby brightening the prospects of higher sales growth in the automotive batteries.

“OE offtake was on a declining trend during the entire quarter. The drop was as sharp as 50 per cent in December. However, we could fully compensate the loss on OE sales by a 27 per cent volume growth in replacement sales coupled with reduced reliance on imported raw material and stringent austerity measures,” an official said.

Replacement segment

Margins in the replacement segment are generally higher than the OE segment. Exide reduced the price of its automotive batteries by seven per cent during the quarter. Company sources ruled out chances of any further reduction in prices at this juncture.

Performance was comparatively better in the industrial battery segment. Riding on continued demand from the telecommunication sector, Exide posted 17 per cent volume growth in sales in this segment. Exide batteries are used in the mobile telecommunication towers.

“Sales volume in the telecommunication segment is expected to be less buoyant in the January-March quarter as the mobile telecommunications sector is expected to slow down its consumption. However, we expect steady volume growth in both traction and UPS home segments,” an official said.

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