Exide Industries posts good Q2 numbers; maintain BUY | Outlook | Fundamental analysis | Financial results | EPS estimates downgraded | Sales up by 23.2% | Indianotes.com


Exide Industries Ltd (Exide) reported Q2FY18 numbers. Following are the key highlights:

  • Sales up by 23.2% (YoY) to Rs23.7bn
  • EBITDA margins declined by 254bps (YoY) to 12.5%
  • PAT (before exceptional items) declined by 2.5%(YoY) to Rs1774mn.

 
 

Valuations & Recommendations

 

We downgrade our EPS estimates by 12.9% and 12.7% for FY18 and FY19 respectively to account for the rising lead prices and keep our sales estimates unchanged on account of good traction in Automotive and Motorcycle batteries. At CMP of Rs212, Exide is currently trading at a PE of 16.7x FY19E and EV/EBITDA of 9.0x FY19E (Net of insurance business). We value Exide’s core battery business at Rs192 per share by applying 20xP/E and valuing insurance business at Rs60 (2.5xFY17 EV). We maintain our BUY rating on the stock with a target price of Rs252.

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