BENGALURU (Reuters) – Indian lead-acid battery maker Exide Industries Ltd reported a lower-than-expected quarterly profit on Monday, hurt by higher raw material costs.
Exide’s net profit after tax was at 2.08 billion rupees ($25.45 million) for the quarter ended March 31, while analysts on average expected a profit of 2.52 billion rupees, according to Refinitiv IBES data.
The company’s 41.20 billion rupees 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 Ltd.
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%, including a 12% rise in the cost of materials consumed.
The earnings before tax, depreciation and amortisation (EBITDA) margin expanded marginally to 10.4% from 10.2% last year.
“However, increase in raw material prices compared to the immediate previous quarter has impacted profitability on a sequential basis,” 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% 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 original equipment manufacturer, with supply side constraints easing out during the quarter,” the company said in an exchange filing.
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, the company added.
Exide’s shares fell 0.5% briefly after the results and were up 3.5% as of 2:16 p.m. IST.
The board of directors recommended a final dividend of two rupees per share for the financial year ended March 31, 2023.
($1 = 81.7380 Indian rupees)
(Reporting by Dimpal Gulwani in Bengaluru)
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