Snapshot:

NSE CODE: EXIDEIND
BSE CODE: 500086
CMP: 121.90
52 WEEK HIGH/LOW: 179.95 / 104.20
MARKET CAP: 10387
PE: 16.29
EPS: 7.50
FACE VALUE : 1.00
BOOK VALUE: 25.76
PBV: 4.74
DIV YIELD (%): 100%

Company Overview:

Exide industries is India’s largest automotive battery maker. It is South Asia’s largest lead acid storage battery manufacturer by far. It has a wide range of products to address virtually every possible energy storage need. From the smallest UPS batteries to the giant submarine batteries ranging from 1.5Ah to 20,400 Ah capacity for both automotive and industrial applications. Exide has a specifically designed product. Its world class manufacturing facilities is matched by marketing prowess and rapid response service back-up. Company share is around 60% in auto batteries and 40% in industrial batteries. Currently, Exide Industries has six manufacturing unit in India in which two each in Maharashtra and Tamil Nadu, one each in West Bengal and Haryana. Company also has a tie-up with two Japanese companies Shin Kobe Denki and Furukawa Battery Company for technical support. There are many brands under Exide Industries like Dynex, Chloride, Index, Standard Furukawa, SF Sonic, Jupiter and Conrex brands. Approximately 10% revenues come from outside India mainly from exports to Europe, South America, Middle East and South East Asia.

Investment Thesis

Sector outlook: Auto and Industrial sector is growing with rapid pace. It is expected to grow with CAGR 15%. Being a market Leader and Strong brand, Exide Industry is poised to take advantage.

Better Result: As per latest result, For FY10, Company reported revenues of Rs. 3,794 crore with net profit of Rs. 537 crore, resulting in EPS of Rs. 6.32. For first three quarters, Net margin jumped to around 15% and EPS around 5.9.

Future Looks Bright : For FY11, company is likely to report revenues of about Rs. 4,400 crore and net profit of Rs. 625 crore, resulting in EPS of around Rs. 7.4. This leads to a PE multiple of less than 16 times, based on current year earnings, for a market leader with absolutely healthy fundamentals.

Expansion: Due to increase in demand in both Industrial and auto, Company started a new motorcycle battery manufacturing plant in Maharashtra. Company is investing close to Rs. 400 crore in next 12-18 months to complete the plant in order to increase the market share.

Strong Shareholding Pattern: As on Dec, 2010. Promoters are holding 45.99% stake and FIIS holding 15.46% & DIIs 16.43% stake. Balance 22.12% is held by public. This % is intact since long time without any much difference which indicates stability in business.

Stake in ING Vyasa: Exide industries has 50% stake in ING Vysya Life Insurance. As of Now, It valued close to 900 crore which is equal to per share valuation of Rs. 11.76.

Rich Asset & Low Debt: The Company has almost negligible debt. Company net worth stand @ Rs. 2,700+ Crore which is quite healthy on valuation perspective.

Competition: Exide enjoys a strong Brand value and lack of big competition in Indian market. It has wide network of distribution which gives High profit margin.

If you are looking to add 1 stock with brand value, then charge your portfolio with Exide Industries. One Can Buy EXIDE INDUSTRIES @ CMP (121) & DECLINE up to 100 FOR TARGET 165+ in Next 12 Months.

Regards – EquityAhead Research!!

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