Exide Industries Q1FY24: Outshining the Competition

By -

Exide Industries - Reports healthy performance in Q1FY24

Exide Industries Ltd, is an Indian multinational storage battery manufacturer company, headquartered in Kolkata. It is the largest manufacturer of automotive and industrial lead-acid batteries in India and fourth largest in the world. It has plants in India and Sri Lanka and dealership network in 46 countries spanning 5 continents. The company has reported a healthy performance in the first quarter of the financial year 2023-24. The company has posted a 7% year-on-year growth in net profit and a 4.4% year-on-year growth in revenue, despite facing challenges from the second wave of the COVID-19 pandemic and rising raw material costs.

Key Highlights of Q1FY24

  • Total operating income for the quarter came in at ₹4,073 crore, up 4.4% YoY.
  • EBITDA for the quarter came in at ₹432 crore with corresponding EBITDA margins at 10.6% (up 20 bps QoQ).
  • PAT in Q1FY24 stood at ₹242 crore (up 16% QoQ, 7% YoY).
  • The company achieved margin expansion by reducing other expenses (down 150 bps QoQ) and improving operational efficiency.
  • The company continued to invest in its lithium-ion battery business and launched specific chargers for its marine and leisure equipment Li-Ion battery range.
  • The company also announced a partnership with Alelion, a Swedish company, to explore opportunities in the energy storage systems market.

Outlook and Valuation

Exide Industries has a strong presence in the domestic lead-acid battery market, catering to various segments such as automotive, industrial, telecom, UPS, and renewable energy. The company is also taking tangible steps to enter the fast-growing lithium-ion battery market, which offers immense potential for growth and diversification. The company is expected to benefit from the recovery in demand from its end-user segments, especially the automotive sector, as well as from its cost optimization measures and product innovation initiatives.

The company’s stock is currently trading at a PE ratio of 26.42, which is lower than its sector PE of 22.04. The company has a market capitalization of ₹21,738 crore and a dividend yield of 0.78%. The company has a strong balance sheet with a debt-to-equity ratio of 0.05 and a return on equity of 7.76%.

Based on these factors, we have a positive outlook on Exide Industries and recommend a buy rating on its stock. Exide Industries is one of the leading players in the storage battery industry and has a proven track record of delivering consistent performance and value to its shareholders.

Conclusion

Exide Industries has reported a healthy performance in Q1FY24, despite facing challenges from the COVID-19 pandemic and rising raw material costs. The company has achieved margin expansion by reducing other expenses and improving operational efficiency. The company has also invested in its lithium-ion battery business and partnered with Alelion to explore opportunities in the energy storage systems market. The company has a strong presence in the domestic lead-acid battery market and is taking steps to enter the fast-growing lithium-ion battery market. The company’s stock is trading at an attractive valuation and offers a good dividend yield. We have a positive outlook on Exide Industries and recommend a buy rating on its stock.

Disclaimer

This blog post is for informational purposes only and does not constitute any investment advice or recommendation. The information contained herein is based on publicly available sources and may not be accurate or complete. Readers should do their own research and analysis before making any investment decisions based on this blog post. The author does not own any shares of Exide Industries Ltd or any other companies mentioned in this blog post. The author does not have any affiliation or relationship with Exide Industries Ltd or any other companies mentioned in this blog post. The author does not accept any liability for any loss or damage arising from the use of this blog post or any information contained herein.

Comments

Post a Comment

Popular posts from this blog

Deccan Gold Mines Up 150% in a Year, Makes Major Lithium Move in Mozambique

By -
Image
The country's only listed gold exploration and mining company Deccan Gold Mines Limited (DGML) acquired majority stake in 5 lithium blocks in Mozambique, Africa  Deccan Gold Mines Limited (DGML), India's sole listed gold exploration and mining company, has recently made a significant move that has caught the attention of investors worldwide. The company has acquired a majority stake in five lithium blocks in Mozambique, Africa, positioning itself within the globally recognized Alto Ligonha pegmatite belt, known for its abundant reserves of lithium-cesium-tantalum (LCT) pegmatites. {jistoc} $title={Table of Contents} A Strategic Acquisition This acquisition is crucial for the mining of lithium, tantalum, and beryllium. The critical mineral concession block has been procured through Deccan Gold FZCO, a wholly-owned subsidiary of DGML. DGFZCO will hold a majority ownership stake of 51% in DGMOZ, with the potential for this ownership to increase to 70% in the near...
Read more

Small Cap Gem: Sakuma Exports Doubles in 2024, Bonus Share Proposal on July 1st?

By -
Image
Sakuma Exports: A Smallcap Stock with Big Returns in 2024 In the world of stock trading, smallcap stocks often go unnoticed. However, one such stock has been making waves in the Indian stock market - Sakuma Exports Ltd. This company, engaged in the buying, processing, marketing, exporting, and importing of agricultural products, has seen its share price double in the calendar year 2024. {jistoc} $title={Table of Contents} A Stellar Performance As of Thursday, June 20, the Sakuma Exports stock price has recorded a nearly 100% year-to-date gain , hitting the day’s high of ₹37.86 apiece on the NSE. This impressive performance is not a sudden phenomenon but the result of a strong run over the past couple of months. The company's shares have been on a steady upward trajectory, reflecting the positive sentiment among investors. The surge in the stock price is a testament to the company's robust business model and its ability to deliver consistent growth. Bonus Issue ...
Read more

Simple Investing: It's Not Rocket Science (But It Takes More Than Luck)

By -
Image
Successful Investing: Simple, But Not Easy Disclaimer:  This blog post is for informational purposes only and should not be taken as financial advice. Always do your own research and consider seeking advice from a certified financial advisor before making any investment decisions. {jistoc} $title={Table of Contents} The Myth of Easy Wealth The bull market of the 1990s created a myth that the stock market was essentially a high-return savings account. This belief was fueled by the ease of access to financial information and the ability to trade stocks online. However, as many investors discovered when the bubble burst, if something looks too good to be true, it usually is. Investing requires more than just opening an online account and watching financial news. It requires a deep understanding of the market, the ability to analyze and interpret financial data, and the discipline to stick to your investment strategy even when the market is volatile. It also requires...
Read more