The Hindu Business Line : Exide net jumps 62%; to pay 40% dividend

Kolkata, April 22 Exide Industries posted 62 per cent growth in net profit to Rs 63 crore in the January-March 2008 quarter compared to Rs 38.5 crore during the corresponding period in the previous year, according to a company release.

The growth in profits had surpassed the rate of growth of turnover. Exide reported 50 per cent growth in turnover from Rs 672 crore to Rs 1,008 crore during the quarter.

The net profit for the entire financial year of 2007-08 grew by 61 per cent from Rs 155 crore to Rs 250 crore. Turnover grew by 51 per cent to Rs 3,606 crore compared with Rs 2,383 crore in 2006-07.

Approving the results, the board of directors declared 40 per cent dividend to shareholders.

Interestingly, the profitability of the company had increased in a year when the lead prices were highly volatile. Lead accounts for approximately 70 per cent of the raw material cost of lead-acid batteries manufactured by Exide.

Elaborating the secretes behind the profitability issues, the company’s Managing Director, Mr T.V. Ramanathan said, “During the year, we could successfully introduce the concept of price escalation clause for most of our institutional customers in industrial batteries, which already existed in the automotive OEM segment. This protected us from the fluctuation in lead prices to a large extent.”

Lead smelting unit

During the year 2007-08, Exide Industries Ltd also made its maiden foray into the business of lead smelting by acquiring Tandon Metals Ltd in Maharashtra. The unit is now a wholly owned subsidiary of Exide.

The acquisition will help Exide to conform the legal requirements of Batteries (Management and Handling Rules), 2001, for recycling the lead in used batteries and augment the availability of indigenous raw materials.

“With our own lead smelting unit in place, we are now in a position to have better control on recycling of used batteries which gives us a major edge over the unorganised sector,” Mr Ramanathan said.

According to the audited financial results, Exide has invested a total sum of Rs 25 crore towards the smelter till March 31, 2008.

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