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April 29, 2010

INDIA: Exide turns in strong 2009 profit growth

India's Exide Industries has posted 2009 net profit of Rs537 crore (US$121m) on the back of turnover up 12% to Rs 3794 crore.

India’s Exide Industries has posted 2009 net profit of Rs537 crore (US$121m) on the back of turnover up 12% to Rs 3794 crore.

The lead acid storage battery manufacturer and energy solutions provider also said it recorded 16% volume growth in automotive batteries, despite heightened competition.

The automotive sector represents some 60% of Exide Industries’ business.

“The [Indian] car industry has huge growth – original equipment and aftermarket,” an Exide Industries spokesman told just-auto from Kolkata. “It is beyond our expectations

“Indian GDP is growing at 8% but some of our sectors are growing at a much faster clip than that. Exchange rates and prices have been stable, if not favourable – these things affect our profitability a lot.”

The spokesman added although Exide had an export market, the power of the Indian domestic economy meant that was the arena on which the company was focussing to generate better margin.

Although the market for electric cars in India was still in its infancy, the Exide spokesman added two-wheel bikes might be adapted for electric use.

“Exide continues to enjoy the trust and be the preferred supplier of most of the vehicle manufacturers in all segments,” said Exide Industries managing director and CEO T V Ramanathan.

“The company was not able to keep pace with the surge in demand in the automotive sector and consequently lost some top line growth due to capacity limitations.”

Exide is expanding its production capacities, which include setting up a new plant at Ahmednagar, Maharashtra. Capital expenditure during the current financial year is expected to be at least Rs 350 crores.   

Exide has also entered into Technical Collaboration Agreements for products such as ISS Batteries for supplies to the automotive sector.

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