Exide 3QFY2011RU-180111 by angelbrokingacme

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									                                                                                                 3QFY2011 Result Update | Auto Ancillary
                                                                                                                               January 18, 2011



 Exide Industries                                                                                   ACCUMULATE
                                                                                                    CMP                                      `138
 Performance Highlights                                                                             Target Price                             `157
 Y/E March (` cr)          3QFY2011       3QFY2010     % chg (yoy)     Angel est.      % diff.      Investment Period                12 Months
 Net sales                    1,050.2         912.9           15.0      1,161.4         (9.6)
 EBITDA                         160.1         218.7         (26.8)        244.1        (34.4)      Stock Info
 EBITDA margin (%)                 15.2        24.0       (871)bp           21.0      (579)bp      Sector                            Auto Ancillary
 Other income                      33.1          1.0      3,148.0               5.0    562.6
                                                                                                   Market Cap (` cr)                         11,696
 Reported PAT                   124.4         130.5          (4.6)        150.6        (17.4)
                                                                                                   Beta                                        0.61
 Exide Industries (Exide) posted a weak performance in 3QFY2011, missing our                       52 Week High / Low                       180/102
 sales and EBITDA estimates by 9.6% and 34.4%, respectively. Performance was                       Avg. Daily Volume                        282,617
 affected by 1) capacity constraints in the automotive batteries segment, forcing the
                                                                                                   Face Value (`)                                   1
 company to divert capacities to meet demand from the low-margin OEM segment
                                                                                                   BSE Sensex                                19,092
 2) lack of buoyancy in the industrial batteries segment and 3) EBITDA margin
 contraction due to a substantial increase in raw-material costs. We maintain our                  Nifty                                      5,724
 positive outlook on the battery industry due to changing demographics, which in                   Reuters Code                             EXID.BO
 turn will support secular consumption growth in Indian markets. However, we                       Bloomberg Code                        EXID@IN
 have revised our earnings estimates downwards to account for lower-than-
 expected 3QFY2011 results. Owing to the recent decline in the stock price, we
 recommend Accumulate (from Neutral) with an SOTP Target Price of `157.                            Shareholding Pattern (%)
 Operating performance nosedives; other income saves the day: For 3QFY2011,                        Promoters                                  46.0
 Exide reported lower-than-expected yoy growth of 15% (down 7% qoq) in net                         MF / Banks / Indian Fls                    26.4
 sales to `1,050.2cr. Growth was led by ~13% yoy growth in volumes. EBITDA                         FII / NRIs / OCBs                          16.0
 margins fell substantially by 871bp yoy (down 653bp qoq) due to higher
                                                                                                   Indian Public / Others                     11.6
 raw-material costs, thus leading to a 26.8% dip in operating profit. However,
 higher other income of `33.1cr restricted the fall in net profit to a certain extent.
 Thus, the bottom line reported a 4.6% yoy decline (down 42% qoq) to `124.4cr.
                                                                                                   Abs. (%)                  3m        1yr      3yr
 Outlook and valuation: We estimate Exide to post a 16.9% CAGR in revenue over
                                                                                                   Sensex                   (5.3)     8.2      0.4
 FY2010–12E, leading to a 15.7% CAGR in the bottom line. At `138, the stock is
 trading at 18.8x FY2011E and 16.3x FY2012E earnings. We recommend                                 Exide Industries      (12.1)      15.2     76.4
 Accumulate (from Neutral) on Exide with an SOTP Target Price of `157. Owing to
 Exide’s defensive appeal and healthy and consistent fundamentals, we value its
 core operations at 16.5x (10% premium to its five-year average of 15x) its
 FY2012E earnings at `140. We value Exide’s stake in ING Vysya Life Insurance at
 `11/share on FY2012E NBAP and have assigned a value of `6/share to its lead
 smelters (8x FY12E PAT).
 Key financials
  Y/E March (` cr)                        FY2009       FY2010        FY2011E          FY2012E
  Net sales                                3,393        3,794          4,410            5,188
  % chg                                     19.3          11.8          16.2             17.7
  Net profit                                 284          537            623              719
  % chg                                     13.6          88.9          15.9             15.5
  EBITDA (%)                                16.1         23.5           19.4             20.9
  Adj. EPS (`)                                3.5          6.3            6.8              8.5
  P/E (x)                                   38.7         21.8           18.8             16.3      Vaishali Jajoo
                                                                                                   022-3935 7800 Ext: 6819
  P/BV (x)                                    9.0          5.3            4.4              3.6
                                                                                                   vaishali.jajoo@angelbroking.com
  RoE (%)                                   24.9         31.0           23.4             24.0
  RoCE (%)                                  31.7         40.8           29.7             31.7
                                                                                                   Yaresh Kothari
  EV/Sales (x)                                3.3          2.8            2.3              1.9
                                                                                                   022-3935 7800 Ext: 6844
  EV/EBITDA (x)                             20.6         11.7           11.8               9.0     yareshb.kothari@angelbroking.com
 Source: Company, Angel Research
Please refer to important disclosures at the end of this report                                                                                  1
                                                            Exide Industries | 3QFY2011 Result Update



                   Exhibit 1: 3QFY2011 performance
                   Y/E March (`cr)            3QFY11 3QFY10           % chg 9MFY11 9MFY10      % chg
                   Net sales                    1,050          913     15.0    3,329   2,767     20.3
                   Consumption of RM                 669       517     29.5    1,988   1,560     27.4
                   (% of sales)                      63.7      56.6             59.7    56.4
                   Staff costs                   63.6         55.2     15.3    197.4   168.0     17.5
                   (% of sales)                       6.1       6.0              5.9     6.1
                   Purchases of TG               13.6           0.6   2,059     49.9     4.6   979.7
                   (% of sales)                       1.3       0.1              1.5     0.2
                   Other expenses               143.4        121.4     18.0    425.2   359.1     18.4
                   (% of sales)                      13.7      13.3             12.8    13.0
                   Total expenditure                 890       694     28.2    2,661   2,092     27.2
                   Operating profit                  160       219    (26.8)    669     675     (1.0)
                   OPM (%)                           15.2      24.0             20.1    24.4
                   Interest                           1.9       2.9   (35.2)     4.9     7.7   (36.2)
                   Depreciation                  21.2         18.9     12.5     60.8    59.8      1.6
                   Other income                  33.1           1.0   3,148     58.4     3.1   1,814
                   PBT (excl. extr. items)      170.2        198.0    (14.0)   661.5   610.8      8.3
                   Extr. Income/(Expense)               -         -        -    46.9       -        -
                   PBT (incl. extr. items)      170.2        198.0    (14.0)   614.6   610.8      0.6
                   (% of sales)                      16.2      21.7             18.5    22.1
                   Provision for taxation        45.8         67.5    (32.2)   205.8   208.3    (1.2)
                   (% of PBT)                        26.9      34.1             33.5    34.1
                   Reported PAT                 124.4        130.5     (4.6)   502.7   402.6     24.9
                   PATM                              11.8      14.3             15.1    14.5
                   Adj PAT                      124.4        130.5     (4.6)   455.8   402.6     13.2
                   Adj. PATM                         11.8      14.3             13.7    14.5
                   Equity capital (cr)           85.0         80.0      6.3     85.0    80.0      6.3
                   EPS (`)                            1.5       1.6   (10.3)     5.9     5.0     17.5
                   Source: Company, Angel Research

                   Net sales up 15%, lower than expectations: For 3QFY2011, Exide reported 15%
                   yoy growth in net sales to `1,050cr (`913cr), which was below our expectation of
                   `1,161cr. Net sales growth was aided by a ~13% yoy jump in volumes.
                   Sequentially, net sales declined by 7%. Overall, sales growth was restricted as the
                   company was unable to meet the unprecedented and sustained surge in demand
                   for auto batteries. Further, due to capacity constraints, the company diverted its
                   production volumes to the less profitable OEM segment at the cost of the more
                   profitable replacement segment, which affected its market share in the
                   replacement segment. This, as guided by management, was to sustain the
                   company’s long-term relationship with OEMs.

                   Moreover, lack of buoyancy in the industrial batteries segment affected the
                   company’s top-line performance. However, management is optimistic about
                   regaining the lost market share in the replacement market and mitigate
                   capacity-constraint problems once additional capacities go on stream from
                   April 2011. Meanwhile, in 2QFY2011, Exide commissioned operations at its new
                   plant in Ahmednagar for motorcycle batteries.




January 18, 2011                                                                                    2
                                                                                                        Exide Industries | 3QFY2011 Result Update



                                                       Exhibit 2: Net sales up 15%; capacity constraints restrict volume growth
                                                           (` cr)                           Net sales (LHS)                yoy growth (RHS)                       (%)
                                                          1,400                                                                                                   35
                                                                                                                          27.5                                    30
                                                          1,200
                                                                                                                  28.9
                                                                                                                                                                  25
                                                          1,000
                                                                                                                                                                  20
                                                            800                                                                                            15.0
                                                                                                        15.9                     18.6
                                                                                                                                                                  15
                                                            600
                                                                                                                                                                  10
                                                            400                              5.6                                                                  5
                                                            200                 (0.3)                                                                             0
                                                                 0                                                                                                (5)
                                                                         1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11 3QFY11

                                                        Source: Company, Angel Research

                                                       EBITDA margins decline substantially, down 871bp: During 3QFY2011, Exide
                                                       witnessed a significant 871bp yoy decline in EBITDA margins to 15.2%, due to a
                                                       717bp yoy increase in raw-material costs, which accounted for around 63.7% of
                                                       sales (56.6% in 3QFY2010). On a sequential basis, margins contracted by 653bp,
                                                       leading to a 34.8% qoq decline in operating profit. Raw-material costs were also
                                                       affected during the quarter, largely because of the ~4.5% yoy and ~17% qoq
                                                       increase in prices of lead, the company’s key input component. Margins also
                                                       declined due to the product mix, which was inclined more towards OEMs during
                                                       the quarter. Moreover, subdued performance in the industrial batteries segment
                                                       affected the company’s operating margins, as industrial batteries command higher
                                                       margins. Additionally, due to its vulnerable position in the replacement segment,
                                                       the company was cautious in passing on the lead price increase, further
                                                       pressurising margins.


Exhibit 3: Average lead prices up 4.5% yoy                                        Exhibit 4: High raw-material cost impacts margins
 (US $/tonne)     Lead inventory (RHS)       Lead prices (LHS)        (tonne)       (%)               EBITDA margin              Raw material cost/sales
  5,000                                                              250,000        70                                                                       65.1
                                                                                              58.2                        59.9          59.6    59.3
                                                                                                        54.9     56.7
                                                                                    60
 4,000                                                               200,000
                                                                                    50
 3,000                                                               150,000        40
                                                                                                        26.0     24.0
                                                                                    30        23.2                        21.2          22.8    21.8
 2,000                                                               100,000
                                                                                    20                                                                       15.2
 1,000                                                               50,000
                                                                                    10

      0                                                              0                  0
         Dec-01       Dec-04             Dec-07            Dec-10                            1QFY10   2QFY10   3QFY10    4QFY10     1QFY11     2QFY11       3QFY11


Source: Company, Bloomberg, Angel Research                                         Source: Company, Angel Research


                                                       Net profit declines 4.6%: Exide reported a 4.6% yoy decline (down 42% qoq) in net
                                                       profit to `124.4cr (`130.5cr) during the quarter, as against our estimate of
                                                       `150.6cr. Net profit margin declined by 279bp yoy to 11.8% in 3QFY2011, as
                                                       against 14.3% in 3QFY2010. However, higher other income at `33.1cr (inclusive
                                                       of net exchange gains of `11cr), up substantially from `1cr in 3QFY2010,
                                                       restricted the fall in net profit to a large extent.

January 18, 2011                                                                                                                                                        3
                                                              Exide Industries | 3QFY2011 Result Update




                   Exhibit 5: Net profit declines 4.6% yoy
                    (`cr)                  Net profit (LHS)              Net profit margin (RHS)          (%)
                    180                                                                                   18
                                        15.7
                    160                              14.3                       14.4        14.7          16
                             13.5                                13.1
                    140                                                                                   14
                                                                                                   11.8
                    120                                                                                   12
                    100                                                                                   10
                     80                                                                                   8
                     60                                                                                   6
                     40                                                                                   4
                     20                                                                                   2
                       0                                                                                  0
                            1QFY10    2QFY10      3QFY10        4QFY10   1QFY11     2QFY11     3QFY11

                   Source: Company, Angel Research




January 18, 2011                                                                                                4
                                                     Exide Industries | 3QFY2011 Result Update



                   Investment arguments
                     Robust demand scenario for auto and industrial batteries: The auto and
                     industrial battery segments have been witnessing strong growth post the
                     economic downturn, driven by robust demand-pull on account of higher auto
                     and industrial production and increased consumer spending. We expect the
                     auto and industrial battery segments to continue to grow, generating robust
                     revenue CAGRs of ~16.9% and ~15.8%, respectively, over FY2010–12E.
                     Hence, we forecast Exide to register strong revenue CAGRs of 17.2% and
                     17.7% in the auto and industrial battery segments, respectively.

                     Market leader with wider reach and strong pricing power: Exide is a dominant
                     player in the auto battery (OEM and replacement) and industrial battery
                     segments with market share of 60–65% and 40–45%, respectively. Exide has
                     leveraged upon its brand equity, better quality proposition and wider reach to
                     consolidate its position in the market, which gives the company a superior
                     pricing power compared to peers. Over the years, Exide has been able to
                     improve its realisation across the auto and industrial battery segments, which
                     has more than offset the movements in input prices. We expect Exide to
                     continue to leverage upon its market leadership position and pricing power,
                     which would enhance the company’s ability to pass on cost increases in the
                     future as well. Hence, we expect average realisation to grow at a ~3.3%
                     CAGR over FY2010–12E.

                     Captive sourcing reduces impact of lead price volatility: Exide acquired
                     Tandon Metals (FY2008) and Leadage Alloys (51% in FY2009 and 49% in
                     2QFY2011) to recycle used lead and lessen the vulnerability of rising lead
                     prices. This reduced the company's dependence on imported lead in FY2010
                     to ~32% (~36% in FY2009). Total lead supplied by the captive smelter
                     increased to ~50% in FY2010 from ~35% in FY2009. Exide has benefitted
                     from its captive sourcing strategy, as lead sourcing from captive smelters is
                     10–15% cheaper compared to market rates.

                     Going forward, Exide plans to increase sourcing from its smelters to ~55% in
                     FY2011E and ~70% by FY2012E. Hence, the company will be expanding its
                     lead smelter capacity to 100,000tpa by March 2011. Our sensitivity analysis
                     suggests that for every 10% increase in sourcing from captive smelters, the
                     company’s EBITDA margins expand by ~50bp (assuming stable lead prices).

                     Capacity expansion to increase volume growth: Exide has been operating at
                     ~90% utilisation levels over the past five years. The company plans to increase
                     its battery capacity with an investment of `400cr in FY2011E to cater to the
                     growing demand. The company also plans to increase its two-wheeler and
                     four-wheeler battery capacity by 60% and 28%, respectively, by FY2011. As a
                     result of increased capacity, we believe Exide is well placed to meet the rising
                     auto battery demand. We estimate the overall utilisation level to remain at
                     78–80% in FY2012E. Further, we expect Exide to post volume CAGRs of
                     13.5% and 14.4% in the auto and industrial battery segments, respectively,
                     over FY2010–12E.




January 18, 2011                                                                                   5
                                                                                                                                                                            Exide Industries | 3QFY2011 Result Update



                                                                                                    Outlook and valuation
                                                                                                    We estimate Exide to post a 16.9% CAGR in revenue over FY2010–12E, leading to
                                                                                                    a healthy 15.7% CAGR in the bottom line. Moreover, the company’s strong brand
                                                                                                    image has been creating value, while continuously improving its RoCE, due to
                                                                                                    better asset turnover on incremental capacities. We believe Exide will continue to
                                                                                                    achieve higher return ratios and better margins on the back of pricing power and
                                                                                                    assuming increased in-house lead supply, which in turn would reduce the impact
                                                                                                    of volatility in lead prices going forward. Further, a strong balance sheet and lower
                                                                                                    debt-to-equity ratio will aid the company in sustaining strong cash flows.

                                                                                                    We have revised our EPS estimates downwards to `6.8 (`7.4 earlier) and to `8.5
                                                                                                    (`9.1 earlier) for FY2011E and FY2012E, respectively, owing to lower-than-
                                                                                                    expected performance during 3QFY2011. At `138, the stock is trading at 18.8x
                                                                                                    FY2011E and 16.3x FY2012E earnings. Owing to the recent decline in the stock
                                                                                                    price, we recommend Accumulate (from Neutral) with an SOTP Target Price of
                                                                                                    `157. Owing to the company’s defensive appeal and healthy and consistent
                                                                                                    fundamentals, we value its core operations at 16.5x (10% premium to its five-year
                                                                                                    average of 15x) its FY2012E earnings at `140. We value Exide’s stake in ING
                                                                                                    Vysya Life Insurance at `11/share on FY2012E NBAP and have assigned a value
                                                                                                    of `6/share to its lead smelters (8x FY2012E PAT).

                                                                                                    Exhibit 6: Change in estimates
                                                                                                    Y/E March                               Earlier estimates                            Revised estimates                                                % chg
                                                                                                                                          FY2011E FY2012E                             FY2011E FY2012E                                     FY2011E FY2012E
                                                                                                    Net sales (` cr)                         4,768                 5,697                       4,410               5,188                           (7.5)                    (8.9)
                                                                                                    OPM (%)                                      21.9                 21.6                      19.4                   20.9                    (249)bp              (71)bp
                                                                                                    EPS (`)                                        7.4                      9.1                    6.8                     8.5                     (8.5)                    (7.0)
                                                                                                    Source: Company, Angel Research




Exhibit 7: One-year forward P/E band                                                                                                     Exhibit 8: One-year forward P/E chart
  (`)             Share price (`)                             6x                 10x                14x                 18x                (x)                     One-yr forward P/E                                                Five-yr average P/E
 200                                                                                                                                                               Long term average P/E
                                                                                                                                           30
 180
 160                                                                                                                                       25
 140
                                                                                                                                           20
 120
 100                                                                                                                                       15
  80
  60                                                                                                                                       10
  40                                                                                                                                        5
  20
   0                                                                                                                                        0
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Source: Company, Bloomberg, Angel Research                                                                                               Source: Company, Bloomberg, Angel Research




January 18, 2011                                                                                                                                                                                                                                                                  6
                                                                                                       Exide Industries | 3QFY2011 Result Update




                                                      Exhibit 9: Key assumptions
                                                       Y/E March                                     FY07      FY08        FY09        FY10        FY11E    FY12E
                                                       Storage batteries (‘000 units)               17,686 17,996 19,109 21,899 24,978 28,275
                                                       yoy chg (%)                                    22.1       1.8           6.2     14.6          14.1     13.2
                                                       Realisation per battery (`)                   1,347     1,978      2,206       2,069        2,135    2,207
                                                       yoy chg (%)                                    10.8      46.8          11.5     (6.2)          3.2      3.3
                                                       Million Ampere Hours (mnAH)                   2,721     3,124      3,475       3,949        4,500    5,097
                                                       yoy chg (%)                                       -      14.8          11.2     13.6          13.9     13.3
                                                       Total gross revenue (` cr)                    2,383     3,606      4,233       4,542        5,345    6,251
                                                       Automotive                                    1,668     2,561      2,905       3,108        3,679    4,271
                                                       yoy chg (%)                                       -      53.6          13.4       7.0         18.4     16.1
                                                       Industrial                                     715      1,019      1,269       1,397        1,625    1,934
                                                       yoy chg (%)                                       -      42.6          24.5     10.1          16.3     19.0
                                                       Other                                           0.1      25.5          59.8     36.7         40.8      45.4
                                                      Source: Company, Angel Research



                                                      Exhibit 10: Angel v/s consensus forecast
                                                                                      Angel estimates                 Consensus                    Variation (%)
                                                                                      FY11E           FY12E       FY11E          FY12E         FY11E        FY12E
                                                      Net sales (` cr)                4,410           5,188       4,833          5,787              (8.8)   (10.3)
                                                      EPS (`)                             6.8            8.5            7.8           9.4          (12.8)   (10.0)
                                                      Source: Bloomberg, Angel Research




Exhibit 11: Auto Ancillary - Recommendation summary
                                            CMP Tgt. price           Upside    P/E (x)                EV/EBITDA (x)             RoE (%)             FY10-12E EPS
Company                   Reco.
                                             (`)        (`)             (%) FY11E FY12E               FY11E     FY12E FY11E             FY12E           CAGR (%)
Amara Raja Batteries Buy                     171         251           46.9    10.3           7.8       5.9         4.6        23.3         24.6               5.7
                   ^
Automotive Axle           Buy                395         525           33.0    12.1       11.3          6.2         5.5        22.1         19.8               9.6
Bharat Forge*&            Buy                349         404           15.8    28.4       17.3         13.9      10.1          16.6         21.7                   -
              #
Bosch India               Accumulate       6,325       6,766            7.0    23.1       20.1         14.2      11.9          23.7         22.7              37.0
Exide Industries          Accumulate         138         157           14.1    18.8       16.3         11.8         9.0        23.4         24.0              15.7
FAG Bearings#             Buy                831       1,035           24.5    11.7       10.8          6.0         5.2        22.9         20.4              39.5
Motherson Sumi*           Accumulate         172         195           13.3    19.7       14.8          8.3         7.1        27.3         32.2              36.7
Subros                    Buy                 40           57          44.1     9.5           7.0       4.3         3.7        11.3         13.9              10.0
                                                                 #                        ^                         &
Source: Company, Angel Research; Note: * Consolidated results;       December year end;       September year end;       FY2011E and FY2012E EPS adjusted for
FCCB interest after tax




January 18, 2011                                                                                                                                                   7
                                                           Exide Industries | 3QFY2011 Result Update




                   Profit & loss statement
                   Y/E March (` cr)               FY2007    FY2008    FY2009   FY2010 FY2011E FY2012E
                   Gross sales                     2,383     3,606     4,233    4,542   5,345    6,251
                   Less: Excise Duty                300        449      464      328     428      500
                   Less: Sales Tax, VAT, Octroi     213        312      376      419     508      563
                   Net Sales                       1,870     2,845     3,393    3,794   4,410    5,188
                   Total operating income          1,870     2,845     3,393    3,794   4,410    5,188
                   % chg                            35.6      52.1      19.3     11.8    16.2     17.7
                   Total Expenditure               1,565     2,373     2,845    2,902   3,554    4,105
                   Net Raw Materials               1,141     1,874     2,248    2,181   2,793    3,289
                   Other Mfg costs                  143        163      188      219     228      242
                   Personnel                        120        146      165      219     241      253
                   Other                            161        191      243      284     292      321
                   EBITDA                           305        472      548      892     856     1,084
                   % chg                            38.8      54.5      16.1     62.8    (4.1)    26.6
                   (% of Net Sales)                 16.3      16.6      16.1     23.5    19.4     20.9
                   Depreciation & Amortisation       54         64       68       81       82      93
                   EBIT                             251        408      480      811     774      991
                   % chg                            52.0      62.2      17.8     69.0    (4.6)    28.0
                   (% of Net Sales)                 13.4       14.3     14.1     21.4    17.6     19.1
                   Interest & other Charges          31         41       52       14        6       7
                   Other Income                      15          7        7       12     109       76
                   (% of PBT)                        6.3        2.0      1.6      1.5    13.1      7.1
                   Recurring PBT                    235        374      435      810     877     1,060
                   % chg                            55.1      59.2      16.3     86.2     8.2     20.9
                   Extraordinary Items                3          2        1         -      47        -
                   PBT (reported)                   232        372      434      811     830     1,060
                   Tax                               80        124      151      273     254      341
                   (% of PBT)                       34.4      33.3      34.7     33.7    30.6     32.2
                   PAT (reported)                   155        250      284      537     623      719
                   Adj. PAT                         152        248      283      537     576      719
                   % chg                            50.9      63.0      14.2     89.7     7.1     24.9
                   (% of Net Sales)                  8.1        8.7      8.3     14.2    13.1     13.9
                   Basic EPS (`)                     2.1        3.1      3.6      6.3     7.3      8.5
                   Adj. EPS (`)                      2.0        3.1      3.5      6.3     6.8      8.5
                   % chg                            50.9      52.9      14.2     78.5     7.1     24.9




January 18, 2011                                                                                     8
                                                             Exide Industries | 3QFY2011 Result Update



                   Balance sheet
                   Y/E March (` cr)              FY2007       FY2008        FY2009        FY2010 FY2011E FY2012E
                   SOURCES OF FUNDS
                   Equity Share Capital                75            80            80           85          85          85
                   Reserves & Surplus              595              946          1,170        2,135       2,611       3,206
                   Shareholders’ Funds             670         1,026             1,250        2,220       2,696       3,291
                   Total Loans                     325              350           317           90          90          90
                   Deferred Tax Liability              45            48            41           59          50          42
                   Total Liabilities              1,040        1,424             1,609        2,369       2,836       3,423
                   APPLICATION OF FUNDS
                   Gross Block                     946         1,097             1,257        1,336       1,575       1,789
                   Less: Acc. Depreciation         480              542           589          660         742         835
                   Net Block                       466              555           668          677         833         954
                   Capital Work-in-Progress            31            47            17           38          16          18
                   Investments                     378              518           668         1,335       1,560       1,883
                   Current Assets                  575              876           742          912        1,142       1,395
                   Cash                                1             2             34             3        155         179
                   Loans & Advances                    29           45             38           48          44          57
                   Other                           545              830           669          861         943        1,159
                   Current liabilities             410              572           487          593         715         827
                   Net Current Assets              165              304           255          319         427         568
                   Total Assets                   1,040        1,424             1,609        2,369       2,836       3,423




                   Cash flow statement
                   Y/E March (` cr)                    FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
                   Profit before tax                         232          372        434        811         830        1,060
                   Depreciation                               54           64            68       81         82          93
                   Change in Working Capital                  25          124        (55)         62        (28)        109
                   Less: Other income                         42          243       (202)        159        (67)        249
                   Direct taxes paid                          80          124        151        273         254         341
                   Cash Flow from Operations                 189          194        498        521         696         672
                   (Inc.)/Dec. in Fixed Assets               (88)     (167)         (130)      (100)       (216)       (216)
                   (Inc.)/Dec. in Investments                (99)     (140)         (150)      (667)       (224)       (323)
                   (Inc.)/Dec. in loans and advances          (0)         (13)           6            3     (10)        (13)
                   Other income                               (7)          14        (41)        (11)             -           -
                   Cash Flow from Investing                 (194)     (307)         (315)      (775)       (451)       (552)
                   Issue of Equity                              -         149             -     530               -           -
                   Inc./(Dec.) in loans                       35           25        (33)      (227)              -           -
                   Dividend Paid (Incl. Tax)                  26           31            37       56         95          99
                   Others                                    (71)         (91)      (156)      (135)       (188)       (196)
                   Cash Flow from Financing                  (10)         113       (151)       224         (93)        (96)
                   Inc./(Dec.) in Cash                       (16)           0            32      (31)       153          24
                   Opening Cash balances                      17            1            2        34              3     155
                   Closing Cash balances                       1            2            34           3     155         179




January 18, 2011                                                                                                          9
                                                           Exide Industries | 3QFY2011 Result Update




                   Key ratios
                   Y/E March                         FY2007 FY2008 FY2009 FY2010 FY2011E FY2012E
                   Valuation ratio (x)
                   P/E (on FDEPS)                      66.5    44.0    38.7    21.8     18.8     16.3
                   P/CEPS                              49.3    35.0    31.2    18.9     17.8     14.4
                   P/BV                                16.4    11.1     9.0     5.3      4.4      3.6
                   Dividend yield (%)                   0.3     0.3     0.4     0.7      0.7      0.9
                   EV/Sales                             6.2     4.1     3.3     2.8      2.3      1.9
                   EV/EBITDA                           38.1    24.4    20.6    11.7     11.8      9.0
                   EV / Total Assets                   11.2     8.1     7.0     4.4      3.6      2.8
                   Per share data (`)
                   EPS (Basic)                          2.1     3.1     3.6     6.3      7.3      8.5
                   EPS (fully diluted)                  2.0     3.1     3.5     6.3      6.8      8.5
                   Cash EPS                             2.8     3.9     4.4     7.3      7.7      9.6
                   DPS                                  0.4     0.4     0.6     1.0      1.0      1.3
                   Book Value                           8.4    12.4    15.2    25.8     31.4     38.4
                   DuPont analysis
                   EBIT margin                         13.4    14.3    14.1    21.4     17.6     19.1
                   Tax retention ratio                  0.7     0.7     0.7     0.7      0.7      0.7
                   Asset turnover (x)                   3.2     3.8     3.9     4.0      4.2      4.3
                   ROIC (Post-tax)                     28.3    36.6    36.0    57.4     51.4     55.5
                   Cost of Debt (Post Tax)              6.6     8.1    10.1     4.4      4.9      4.9
                   Leverage (x)                            -       -       -       -        -        -
                   Operating ROE                       28.3    36.6    36.0    57.4     51.4     55.5
                   Returns (%)
                   ROCE (Pre-tax)                      26.0    33.1    31.7    40.8     29.7     31.7
                   Angel ROIC (Pre-tax)                40.7    47.0    54.9    81.1     71.0     74.4
                   ROE                                 24.9    29.2    24.9    31.0     23.4     24.0
                   Turnover ratios (x)
                   Asset Turnover (Gross Block)         2.0     2.8     2.9     2.9      3.0      3.1
                   Inventory / Sales (days)              62      62      54      50       51       50
                   Receivables (days)                    29      26      26      23       26       26
                   Payables (days)                       53      51      46      42       43       40
                   WC cycle (ex-cash) (days)             30      30      28      26       24       23
                   Solvency ratios (x)
                   Net debt to equity                  (0.1)   (0.2)   (0.3)   (0.6)    (0.6)    (0.6)
                   Net debt to EBITDA                  (0.2)   (0.4)   (0.7)   (1.4)    (1.9)    (1.8)
                   Interest Coverage (EBIT / Int.)      8.1    10.0     9.3    60.1    123.1    152.1




January 18, 2011                                                                                   10
                                                                                          Exide Industries | 3QFY2011 Result Update




  Research Team Tel: 022 - 3935 7800                E-mail: research@angelbroking.com                  Website: www.angelbroking.com

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 Disclosure of Interest Statement                                            Exide Industries
 1. Analyst ownership of the stock                                                  Yes
 2. Angel and its Group companies ownership of the stock                            No
 3. Angel and its Group companies' Directors ownership of the stock                 No
 4. Broking relationship with company covered                                       No
 Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors




 Ratings (Returns):              Buy (> 15%)                      Accumulate (5% to 15%)                 Neutral (-5 to 5%)
                                 Reduce (-5% to 15%)              Sell (< -15%)



January 18, 2011                                                                                                                          11

								
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