Indian lead-acid battery maker Exide Industries reported a lower-than-expected quarterly profit on Monday, hurt by higher raw material costs.
Exide’s net profit after tax was at Rs 208 crore for the quarter that ended 31 March, while analysts on average expected a gain of Rs 252 crore, according to Refinitiv IBES data.
The company’s Rs 4120 crore net profit after tax from a year earlier had included a one-time gain from the sale of Exide’s insurance unit to HDFC Life Insurance Company.
While Exide and other auto ancillaries benefitted from strong demand for vehicles and price hikes in the quarter they also grappled with high costs of lead and other raw materials.
Exide’s total expenses jumped 3.8 per cent, including a 12 per cent rise in the cost of materials consumed.
The earnings before tax, depreciation and amortisation (EBITDA) margin expanded marginally to 10.4 per cent from 10.2 per cent last year.
“However, the increase in raw material prices compared to the immediate previous quarter has impacted profitability sequentially,” said Subir Chakraborty, managing director and chief executive.
The company, which has clients in the auto, industrial, telecom and railway sectors, reported a 3.7 per cent rise in revenue from operations to 35.43 billion rupees.
Overall volumes in the domestic market for the automotive vertical registered year-on-year growth, while “demand was strong from the original equipment manufacturer, with supply side constraints easing out during the quarter,” the company said in an exchange filing.
The company added that the industrial verticals including industrial UPS, solar, traction, telecom and power saw growth amid an increase in capex and economic activity with strong order inquiry during the quarter.
Exide’s shares fell 0.5 per cent briefly after the results and were up 3.5 per cent as of 2:16 p.m. (local time).
The board of directors recommended a final dividend of two rupees per share for the financial year ending 31 March 2023.
