- Exide Industries Q2FY18 EBITDA margin came in at 12.5% below our and consensus estimates of 15% and 14.5% respectively, largely on account of higher RM cost
- Net revenue stood at Rs 23.7 bn (+23.2% YoY, +12.8% QoQ) – ahead of our and consensus estimates. Our channel checks indicate re-stocking of inventory with dealers post GST implementation. Company has indicated that volumes grew significantly for Automotive and Motorcycle batteries and growth in UPS.
- EBITDA margin for the quarter stood at 12.5% ( -250 bps YoY / -290 bps QoQ) vs. our/consensus est. of 15%/14.5% respectively.
o Reported EBITDA at Rs 2.9 bn (+2.3% YoY, -8.8% QoQ) was -7.9%/-6.1% below our/consensus est.
- RM cost for the quarter increased to 67% (+410 bps QoQ) on account of decrease of inventory. Company has indicated that higher lead prices remains a concern. Possibly, GST transition related issues may have also led to higher RM cost.
o Employee expenses declined -60 bps QoQ to 6.2%
o Other expenses declined -60 bps QoQ to 14.3%
o Reported net profit stood at Rs1.3 bn, lower by -25.5% YoY / -28.3% QoQ; Tax rate for the quarter stood at 34.3% (vs 32.4% QoQ)
o Adjusted net profit stood at Rs1.6 bn (-10.3% YoY / -13.7% QoQ) was -14.3%/-14.1% below our/consensus estimates.
- During the quarter there was Rs418 mn exceptional expense towards settlement of dispute with Exide Technologies, USA in relation to the usage of the name of “Exide”.
- We will revise our estimates post management interaction. We currently have a BUY rating on the stock.
Q2FY18 – Actual vs. Estimated performance
|
Rs mn
|
Actual
|
Emkay Est
|
Var (%)
|
Consensus
|
Var (%)
|
|
Net Sales
|
23,713
|
21,449
|
10.6
|
21,668
|
9.4
|
|
EBIDTA
|
2,959
|
3,214
|
(7.9)
|
3,150
|
(6.1)
|
|
Margin (%)
|
12.5
|
15.0
|
-250 bps
|
14.5
|
-206 bps
|
|
APAT
|
1,630
|
1,903
|
(14.3)
|
1,898
|
(14.1)
|
|
EPS
|
1.92
|
2.24
|
-14.35
|
2.23
|
(14.1)
|
Source: Company, Bloomberg, Emkay Research
Quarterly Performance Trend
|
Rs mn
|
Q1FY17
|
Q2FY17
|
Q3FY17
|
Q4FY17
|
Q1FY18
|
Q2FY18
|
YoY (%)
|
QoQ(%)
|
1HFY18
|
1HFY17
|
YoY(%)
|
|
Revenue
|
20,111
|
19,253
|
17,293
|
19,757
|
21,029
|
23,713
|
23.2
|
12.8
|
44,742
|
39,363
|
13.7
|
|
Expenditure
|
16,961
|
16,361
|
14,996
|
17,139
|
17,786
|
20,754
|
26.9
|
16.7
|
38,541
|
33,322
|
15.7
|
|
as % of sales
|
84.3
|
85.0
|
86.7
|
86.7
|
84.6
|
87.5
|
86.1
|
84.7
|
|||
|
Consumption of RM
|
12,543
|
11,791
|
10,376
|
12,368
|
13,232
|
15,885
|
34.7
|
20.0
|
29,117
|
24,334
|
19.7
|
|
as % of sales
|
62.4
|
61.2
|
60.0
|
62.6
|
62.9
|
67.0
|
65.1
|
61.8
|
|||
|
Employee Cost
|
1,291
|
1,320
|
1,282
|
1,303
|
1,430
|
1,480
|
12.2
|
3.5
|
2,911
|
2,611
|
11.5
|
|
as % of sales
|
6.4
|
6.9
|
7.4
|
6.6
|
6.8
|
6.2
|
6.5
|
6.6
|
|||
|
Other expenditure
|
3,127
|
3,251
|
3,339
|
3,468
|
3,124
|
3,389
|
4.3
|
8.5
|
6,513
|
6,378
|
2.1
|
|
as % of sales
|
15.5
|
16.9
|
19.3
|
17.6
|
14.9
|
14.3
|
14.6
|
16.2
|
|||
|
EBITDA
|
3,150
|
2,891
|
2,296
|
2,618
|
3,243
|
2,959
|
2.3
|
(8.8)
|
6,202
|
6,041
|
2.7
|
|
Depreciation
|
491
|
506
|
522
|
544
|
563
|
597
|
17.9
|
6.0
|
1,160
|
997
|
16.3
|
|
EBIT
|
2,659
|
2,385
|
1,774
|
2,073
|
2,680
|
2,362
|
(1.0)
|
(11.9)
|
5,042
|
5,044
|
(0.0)
|
|
Other Income
|
143
|
231
|
350
|
215
|
132
|
139
|
(40.0)
|
5.0
|
271
|
374
|
(27.6)
|
|
Interest
|
17
|
6
|
46
|
0
|
16
|
21
|
259.3
|
35.9
|
37
|
23.0
|
60.0
|
|
PBT
|
2,784
|
2,611
|
2,079
|
2,289
|
2,796
|
2,480
|
(5.0)
|
(11.3)
|
5,276
|
5,395
|
(2.2)
|
|
Total Tax
|
824
|
793
|
564
|
641
|
906
|
849
|
7.2
|
(6.3)
|
1,756
|
1,616
|
8.6
|
|
Adjusted PAT after MI
|
1,961
|
1,818
|
1,515
|
1,648
|
1,890
|
1,630
|
(10.3)
|
(13.7)
|
3,520
|
3,779
|
(6.8)
|
|
Extra ordinary items Loss/(Gain)
|
0
|
0
|
0
|
0
|
0
|
275
|
275
|
0
|
|||
|
Reported PAT
|
1,961
|
1,818
|
1,515
|
1,648
|
1,890
|
1,355.2
|
(25.5)
|
(28.3)
|
3,245
|
3,779
|
(14.1)
|
|
Adjusted EPS
|
2.3
|
2.1
|
1.8
|
1.9
|
2.2
|
1.9
|
(10.3)
|
(13.7)
|
4.1
|
4.4
|
(6.8)
|
|
Margins (%)
|
(bps)
|
(bps)
|
(bps)
|
||||||||
|
EBIDTA
|
15.7
|
15.0
|
13.3
|
13.3
|
15.4
|
12.5
|
-254
|
-294
|
13.9
|
15.3
|
(149)
|
|
EBIT
|
13.2
|
12.4
|
10.3
|