Exide Industries has registered a sharp jump in standalone net profit at ₹4,120 crore for the quarter ended March 31, 2022, as compared with ₹244 crore same period last year primarily on account of gain arising from the sale of its erstwhile material subsidiary company – Exide Life Insurance Company.  

The profit before tax before the exceptional item amounting to ₹4,694 crore pertaining to gain arising from the sale is down by nearly 18 per cent at ₹271 crore during the quarter under review as against ₹330 crore same period last year.    

Standalone revenue from operations during the quarter grew by nearly 16 per cent at ₹3,409 crore as compared with ₹2,939 crore same period last year.

The company’s board had, in September last year, approved divestment of entire equity shareholding held in Exide Life Insurance Company Limited (ELIC), a material wholly-owned subsidiary in favour of HDFC Life Insurance Company Limited (HLIC). Post receipt of all requisite regulatory approvals the aforesaid transaction was completed on January I, 2022. Resulting net gain on disposal of investments in ELIC has been disclosed as exceptional item in the results, Exide said in the notes to accounts to BSE on Thursday.

Sales for year grew at 23%

According to Subir Chakraborty, MD & CEO, Exide, sales growth of 16 per cent is supported by overall volume growth and calibrated pricing strategies, implemented across various verticals. For the full financial year 2021-22, sales grew at a robust rate of 23 per cent.

“The company was successful in appreciably lowering fixed costs; however, this could not fully neutralise the inflationary impact of sharp and continued escalation in prices of inputs, coupled with runaway fuel and freight costs, leading to decline in operating margins. Lowering of fixed costs came about from the bold initiatives undertaken in sales transformation and cost compression strategies, which are presently yielding handsome results,” he said in a press statement.

Total fixed expenses (employee costs and other expenses) were 19.5 per cent of sales in FY22 against 21 per cent in FY21. The company’s balance sheet remains strong with zero debt and a comfortable liquidity position, the release said.

In the automotive vertical, the double-digit growth was led by further strengthening of its new initiatives in both trade sales and service. Demand for industrial UPS batteries continues to remain strong compared to the fourth quarter in the previous year. Solar, railways, and infrastructure verticals have also registered excellent volume growth in this quarter over previous year.

“We continue to increase our presence in global markets with exports growing at a much faster pace, both in automotive and industrial verticals,” it said.

Lithium ion business

Exide, which set up wholly owned subsidiary Exide Energy Solutions for lithium-ion business, is in advanced stages of procuring a land parcel for the project in Karnataka.

The subsidiary will be engaged in manufacturing battery cells of advanced chemistry in multiple formats.

The company has entered into a multi-year technical collaboration agreement with SVOLT Energy Solutions (SVOLT), for lithium-ion cell manufacturing. It will also provide the support required for setting the plant on a turnkey basis.

“Exide is strategically moving forward towards accomplishing its aspiration of becoming a leading player in the rapidly emerging new-age electric mobility and stationary application businesses. We are excited to partner with SVOLT which has strong technical expertise, R&D capabilities, and rich experience in manufacturing lithium-ion batteries. Under the newly formed wholly owned subsidiary, Exide Energy Solutions, Exide plans to set-up a multi-gigawatt hour lithium-ion cell manufacturing facility. Spread out across two popular cell chemistries and three cell formats, this unit shall be uniquely placed to cater to the diverse requirements of customers in India,” Chakraborty said.

The company’s scrip closed at ₹148.90, down by 2.23 per cent on the BSE on Thursday.

comment COMMENT NOW