Exide Industries' Net sales registered a growth of 17.51% to Rs.19123.60 million for the quarter ended June 30th 2014 as against Rs.15412.00 million for the corresponding quarter last year. Buy for a target of Rs.180.00.

1. CMP 160.05
Target Price 180.00
ISIN: INE302A01020
JULY 23rd
, 2014
EXIDE INDUSTRIES LTD
Result Update (PARENT BASIS): Q1 FY15
BUYBUYBUYBUY
Stock Data
Sector Auto Components
BSE Code 500086
Face Value 1.00
52wk. High / Low (Rs.) 170.00/99.05
Volume (2wk. Avg ) 502300
Market Cap ( Rs in mn ) 136042.50
Annual Estimated Results (A*: Actual / E*: Estimated)
Years FY14A FY15E FY16E
Net Sales 59726.60 68685.59 77958.14
EBITDA 8498.70 9565.52 10696.04
Net Profit 4870.80 5583.67 6330.55
EPS 5.73 6.57 7.45
P/E 27.93 24.36 21.49
Shareholding Pattern (%)
1 Year Comparative Graph
EXIDE INDUSTRIES LTD BSE SENSEX
SYNOPSIS
Exide Industries Ltd manufactures the widest
range of storage batteries in the world from
2.5 Ah to 20,400 Ah capacities, covering the
broadest spectrum of applications.
Net sales registered a growth of 17.51% to
Rs.19123.60 million for the quarter ended
June 30th 2014 as against Rs.15412.00 million
for the corresponding quarter last year.
Profit before Tax (PBT) for the June quarter
increased by 12.19% to Rs. 2673.00 million
from Rs. 2382.50 million in the corresponding
quarter ending of previous year.
The company’s net profit stood at Rs. 1853.00
million in Q1 FY15 against Rs. 1588.00 million
in Q1 FY14.An increase of 16.69% y-o-y.
Profits before Interest, Tax, Dep was at Rs.
2998.70 million as compared to Rs. 2686.50
million in the corresponding period of the
previous year.
The company has declared an interim
dividend of Rs. 1.50/- Per share on the face
value of Re.1.00/- each for the year 2014 – 15.
Total Income has increased from Rs. 16336.80
million for the June quarter of FY15 to Rs.
19211.00 million for the same period of
previous financial year.
Net Sales and PAT of the company are
expected to grow at a CAGR of 9% and 7%
over 2013 to 2016E respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
Exide Industries Ltd 160.05 136042.50 5.73 24.61 3.23 180.00
Motherson Sumi Systems Ltd 356.90 314757.00 6.07 58.80 19.39 250.00
Amtek Auto Ltd 242.40 52994.40 12.30 19.71 1.10 25.00
Tube Investments of India Ltd 293.55 54877.20 5.03 58.36 4.43 100.00

2. Analysis & Recommendation - ‘BUY’
During the quarter ending 30th June, 2014, Exide Industries Ltd reported a total income of Rs. 19211.00 million
against Rs. 16336.80 million in previous year period, which represents growth of 17.59%. The company earned
profit after tax of Rs. 1853.00 million, representing growth of 16.69% y-o-y. whereas Profits before Interest, Tax,
Dep was at Rs. 2998.70 million as compared to Rs. 2686.50 million in the corresponding period of the previous
year. PBT for the June quarter increased by 12.19% to Rs. 2673.00 million from Rs. 2382.50 million in the
corresponding quarter ending of previous year. During the quarter, demand for both Automotive and industrial
battery remained subdued. Improvement in its Automobile replacement battery sale accompanied by robust
growth in inverter battery sale for both automotive and industrial SBU along with re entry in to telecom business
helped improving performance.
The Company continues to focus on cost control and Technology up gradation to improve profit. This will enable
the company to succeed in its marketing efforts in a highly competitive market in the future. We expect that the
company surplus scenario is likely to continue for the next three years, will keep its y-o-y growth story in the
coming quarters also. Over FY2013-16E, we expect the company to post a CAGR of 9% and 7% in its top-line and
bottom-line respectively. Hence, we recommend ‘BUY’ for ‘EXIDE INDUSTRIES LTD’ with a target price of Rs.
180.00 for medium to long term investment.
Investment Highlights (PARENT BASIS)
Results updates- Q1 FY15,
Rs. In million JUNE-14 JUNE-13 % Change
Net Sales 19123.60 16274.70 17.51
PAT 1853.00 1588.00 16.69
EPS 2.18 1.87 16.69
EBITDA 2998.70 2686.50 11.62
The company’s net profit Jumps to Rs. 1853.00 million against Rs. 1588.00 million in the corresponding quarter
ending of previous year, an increase of 16.69% Y-O-Y. Net sales for the quarter rise up by 17.51% to Rs. 19123.60
million from Rs. 16274.70 million in the prior period last year. Reported earnings per share of the company
stood at Rs. 2.18 a share during the quarter, registering at 16.69% increase over previous year period. EBITDA is
Rs. 2998.70 million as against Rs. 2686.50 million in the corresponding period of the previous year.

3. Expenditure:
During the quarter, total Expenditure rose by 19 per cent mainly on account of increased cost of material
consumed by 10%, Depreciation by 8% and other expenses by 16% increase are the primary attribute for the
growth of expenditure when compared to corresponding quarter of previous year. Total expenditure in Q1 FY15
stood to Rs. 16535.60 million as against Rs. 13950.70 million in Q1 FY14.
Break up of Expenditure
In Rs. Millions
Q1 FY15 Q1 FY14
Cost of Material consumed 13295.10 12073.10
Purchases of Stock in Trade 1.90 10.90
Employee Benefit Expenses 1000.10 937.90
Depreciation & Amortization
Expenses
323.30 300.40
Other Expenditure 2542.20 2195.80
Company Profile
Exide Industries Limited was incorporated as Associated Battery Makers (Eastern) Ltd, on 31st Jan, 1947 under
the Companies Act, 1913 to purchase all or any of the assets of the business of manufacturers, buyers and sellers
of and dealers in & repairers of electrical and chemical appliances and goods carried on by the Chloride Electric
Storage Company (India) Ltd, in India , since 1916 with a view thereto to enter into and carry into effect (either
with or without modification) an agreement has prepared & expressed to be made between the Chloride Electric
Strage Co (India) Ltd on the one part and the Company of the other part.
The name of the Company was changed to Chloride India Ltd on 2nd August, 1972. The name of the Company
was again changed to Chloride Industries Ltd. vide fresh Certificate of Incorporation dated 12th October, 1988.
The name of the Company was further changed to Exide Industries Ltd. on 25th August, 1995.
The Company manufactures the widest range of storage batteries in the world from 2.5 Ah to 20,400 Ah
capacities, covering the broadest spectrum of applications. The Company has six factories strategically located
across the country-two in Maharashtra and Tamil Nadu, one in West Bengal, and one in Haryana. The Company’s
predecessor carried on their operations as import house from 1916 under name Chloride Electrical Storage
Company. Thereafter, the Company started manufacturing storage batteries in the country and has grown to
become one of the largest manufacturer and exporter of batteries in the sub-continent. Exide separated from its
UK-based parent, Chloride Group Plc., in 1989, after the latter divested its ownership in favour of a group of
Indian shareholders. The Company has grown steadily, modernized its manufacturing processes and taken
initiatives on the service front.

4. Business Areas:
Automotive Batteries
In India the company markets the products under Exide, SF, Sonic and Standard Furukawa brands and supplies
to all car and two-wheeler manufacturers. In international market sells products under Dynex, Index & Sonic
brands. It has distribution network of 4000 outlets, supported by 4 regional offices and 28 branch offices. It also
exports batteries to the Middle East, Japan and CIS countries.
Industrial Batteries
It manufactures industrial batteries in a wide range from 2.5 Ah to 20,600 Ah. In India it sells products under
Exide, Index, SF, CEIL and Power Safe brands and in international market under CEIL, Chloride and Index
brands. Industrial batteries cater mostly to the infrastructure sector such as railways, telecom, power plants,
solar cells and other industrial segments including uninterrupted power supply, inverters and traction
batteries.
Submarine Batteries
The Company is also engaged in manufacturing of high-end submarine batteries (Type 1, 2 & 3). It is one of the
five companies in the world which has capacity to manufacture submarine batteries for Russian and German
types. It manufactures two to three submarines.

5. Financial Highlight (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance sheet as at March 31st, 2013-2016E
FY-13A FY-14A FY-15E FY-16E
EQUITY AND LIABILITIES
Shareholder's Funds
a) Share Capital 850.00 850.00 850.00 850.00
b) Reserves and Surplus 33385.90 36464.60 40357.32 44393.06
1. Sub Total - Net worth 34235.90 37314.60 41207.32 45243.06
Non-Current Liabilities
a) Deferred Tax Liability (net) 976.50 1050.70 1128.45 1184.87
b) Other Long term liabilities 71.40 57.60 47.81 40.17
c) Long Term Provisions 205.90 203.80 207.88 210.99
2. Sub Total - Non-Current Liabilities 1253.80 1312.10 1384.14 1436.03
Current Liabilities
a) Trade payables 5604.10 6529.60 7404.57 8145.02
b) Other Current liabilities 2625.00 2485.20 2398.22 2326.27
c) Short term Provisions 1764.70 1924.70 2086.37 2190.70
3. Sub Total - Current Liabilities 9993.80 10939.50 11889.16 12661.99
Total Liabilities (1+2+3) 45483.50 49566.20 54480.62 59341.08
ASSETS
Non-Current Assets
Fixed Assets
i. Tangible Assets 9775.70 9768.30 10159.03 10504.44
ii. Intangible Assets 168.40 211.90 262.76 315.31
iii. Capital work-in-progress 587.70 509.80 458.82 408.35
a) Total Fixed Assets 10531.80 10490.00 10880.61 11228.10
b) Non Current Investments 14594.00 15946.00 17285.46 18564.59
c) Long Term loans and advances 516.20 641.90 763.86 878.44
d) Other non-current assets 14.50 12.00 10.56 11.19
4. Sub Total - Non-Current Assets 25656.50 27089.90 28940.49 30682.32
Current Assets
a) Current Investments 1807.30 3724.10 5695.32 7521.82
b) Inventories 11671.00 11855.70 12270.65 12761.48
c) Trade receivables 5091.90 5166.40 5290.39 5449.11
d) Cash and Bank Balances 747.90 1199.50 1703.29 2299.44
e) Short-terms loans & advances 482.00 530.60 580.48 626.91
f) Other current assets 26.90 0.00 0.00 0.00
5. Sub Total - Current Assets 19827.00 22476.30 25540.13 28658.76
Total Assets (4+5) 45483.50 49566.20 54480.62 59341.08

6. Annual Profit & Loss Statement for the period of 2013 to 2014E
Value(Rs.in.mn) FY13A FY14A FY15E FY16E
Description 12m 12m 12m 12m
Net Sales 60768.30 59726.60 68685.59 77958.14
Other Income 704.20 246.10 327.31 366.59
Total Income 61472.50 59972.70 69012.90 78324.74
Expenditure -52873.20 -51474.00 -59447.38 -67628.69
Operating Profit 8599.30 8498.70 9565.52 10696.04
Interest -41.70 -11.90 -9.28 -7.89
Gross profit 8557.60 8486.80 9556.24 10688.16
Depreciation -1134.80 -1256.00 -1369.04 -1486.78
Profit Before Tax 7422.80 7230.80 8187.20 9201.38
Tax -2195.00 -2360.00 -2603.53 -2870.83
Net Profit 5227.80 4870.80 5583.67 6330.55
Equity capital 850.00 850.00 850.00 850.00
Reserves 33138.70 36227.40 40357.32 44393.06
Face value 1.00 1.00 1.00 1.00
EPS 6.15 5.73 6.57 7.45
Quarterly Profit & Loss Statement for the period of 31st DEC, 2013 to 30th SEP, 2014E
Value(Rs.in.mn) 31-Dec-13 31-Mar-14 30-Jun-14 30-Sep-14E
Description 3m 3m 3m 3m
Net sales 13039.30 16129.80 19123.60 17498.09
Other income 49.20 98.10 87.40 78.66
Total Income 13088.50 16227.90 19211.00 17576.75
Expenditure -11613.40 -13940.90 -16212.30 -15135.85
Operating profit 1475.10 2287.00 2998.70 2440.90
Interest -3.80 0.20 -2.40 -3.02
Gross profit 1471.30 2287.20 2996.30 2437.88
Depreciation -316.60 -325.80 -323.30 -334.29
Profit Before Tax 1154.70 1961.40 2673.00 2103.59
Tax -379.50 -640.00 -820.00 -656.32
Net Profit 775.20 1321.40 1853.00 1447.27
Equity capital 850.00 850.00 850.00 850.00
Face value 1.00 1.00 1.00 1.00
EPS 0.91 1.55 2.18 1.70

7. Ratio Analysis
Particulars FY13A FY14A FY15E FY16E
EPS (Rs.) 6.15 5.73 6.57 7.45
EBITDA Margin (%) 14.15 14.23 13.93 13.72
PBT Margin (%) 12.21 12.11 11.92 11.80
PAT Margin (%) 8.60 8.16 8.13 8.12
P/E Ratio (x) 26.02 27.93 24.36 21.49
ROE (%) 15.38 13.14 13.55 13.99
ROCE (%) 28.64 26.31 26.54 26.93
EV/EBITDA (x) 15.73 15.87 14.04 12.50
Book Value (Rs.) 39.99 43.62 48.48 53.23
P/BV 4.00 3.67 3.30 3.01
Charts

8. Outlook and Conclusion
At the current market price of Rs.160.05, the stock P/E ratio is at 24.36 x FY15E and 21.49 x FY16E
respectively.
Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.6.57 and Rs.7.45
respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 7% over 2013 to 2016E
respectively.
On the basis of EV/EBITDA, the stock trades at 14.04 x for FY15E and 12.50 x for FY16E.
Price to Book Value of the stock is expected to be at 3.30 x and 3.01 x respectively for FY15E and FY16E.
Hence, we recommend ‘BUY’ in this particular scrip with a target price of Rs.180.00 for Medium to Long
term investment.
Industry Overview
Auto industry has been recording tremendous growth in India over the years and has emerged as a major
contributor to India’s gross domestic product (GDP). The industry currently accounts for almost 7 per cent of our
GDP and employs about 19 million people both directly and indirectly.
The automotive industry occupies a significant place in the Indian economy. India is emerging as a global hub for
auto component sourcing and is set to break into the league of the top five vehicle producing nations worldwide.
The country is also emerging as a sourcing hub for engine components. The Indian auto component sector covers
a wide range of industries, including engine parts, drive transmission and steering parts, body and chassis,
suspension and braking parts, equipment and electrical parts, besides others.
The ever-increasing development in infrastructure, huge domestic market, increasing purchasing power and
stable government framework have made India a favourable destination for investment, as per the vision of
Automotive Mission Plan (AMP) 2006–2016.
Market Structure
The Indian auto component industry is estimated to have a US$ 66 billion turnover by 2015–16 and is
expected to grow at a 14 per cent compound annual growth rate (CAGR) by 2013–2021, according to
Automotive Component Manufacturers’ Association of India (ACMA) – the nodal agency for the Indian auto
component industry. In addition, industry exports are estimated to reach US$ 12 billion by 2015–16.

9. The cumulative foreign direct investment (FDI) inflows into the Indian automobile industry during the
period April 2000 to January 2014 was recorded at US$ 9,344 million.
According to data released by the Society of Indian Automobile Manufacturers (SIAM), the domestic sales of
automobiles during 2013–14 grew by 3.53 per cent over the same period last year. The automobile exports
grew 7.21 per cent during the fiscal.
India has become a research and development (R&D) hotbed and in keeping with the global R&D trend of last
year, the country is now a preferred destination for automotive R&D, according to a study on the Global Top
500 R&D spenders done by Zinnov. India's position is highlighted by the fact that 874 MNCs have set up
1,031 centres and 45 per cent of the top 500 global R&D spenders have a presence here.
India: The Global Auto Hub
• Nissan India is currently exporting a number of child parts, engine and body parts to overseas markets. “We
export to about 101 countries worldwide and there are many parts that we export from India regularly to 14
countries, including big markets like the UK, Brazil, Mexico and USA.
• South Africa is pitching its auto component industry to Indian automakers for partnerships. Accompanied by
a delegation of 27 companies, Ms Elizabeth Thabethe, Deputy Minister of Trade and Industry, South Africa,
met Indian companies in a trade summit facilitated by Southern India Chamber of Commerce and Industry.
• RSB Transmissions has entered into a partnership with DHB Automotivos, Brazil to launch auto components
in India. The new range of products was unveiled at the Auto Expo 2014 Components Show at Pragati
Maidan, New Delhi. Launched fully assembled manual/power steering gears and also auto components like
steering rack & pinion, tie rod, hydraulic pump and aluminium pump in ultra-modern tech facilities in
partnering with DHB Automotivos, Brazil.
• Volkswagen is looking at investing Rs 15000.00 million (US$ 248.55 million) over the next five years to set
up a diesel engine manufacturing facility.
• Infosys has signed a multi-year contract with Volvo Cars to provide application development services to the
latter's global operations. The application development work includes maintaining applications to support
multiple domains, including marketing and sales, customer service, manufacturing, product development and
corporate business functions.
Key Developments & Investments
Denso International India is working on future components for improving fuel emissions for Indian as well as
global cars, two-wheelers and commercial vehicles manufacturers. The company manufactures components
such as air conditioning systems, fuel pump, inter-coolers, power window motors, radiator, starter motor,

10. and engine cooling modules from its manufacturing plants in Jhajjar and Manesar in Haryana, Bengaluru,
Haridwar and Greater Noida.
Tata Opportunities Fund will purchase a significant minority stake in Aurangabad-based auto component
maker Varroc group for US$ 60 million.
MRF launched main wheel tyres for the Indian Air Force (IAF)'s Sukhoi 30 MKI. These tyres were designed by
MRF's inhouse R&D facilities and have been tested for ground speeds of up to 420 km an hour with loads in
excess of 18 tonnes a tyre.
Tata Cummins, a joint venture (JV) between Cummins Inc and Tata Motors, inaugurated its third
manufacturing facility located at the Cummins Megasite in Phaltan to manufacture diesel engines.
Government Initiatives
The Government of India allows 100 per cent FDI in the automotive industry through automatic route. With a
special focus on exports of small cars, multi-utility vehicles (MUVs), two and three wheelers and auto
components, the automotive sector’s contribution to the GDP is expected to double reaching a turnover worth
US$ 145 billion in 2016, according to the AMP 2006–2016.
The Interim Budget 2014–15 added some incentives to the auto industry. To give relief to the automobile
industry the excise duty has been reduced till June 30, 2014 as follows:
For small cars, motorcycle, scooters – the duty has been reduced from 12 per cent to 8 per cent.
For commercial vehicles and SUVs – the duty has been reduced from 30 per cent to 24 per cent.
For large and mid-segment cars – the duty has been reduced from 27/24 per cent to 24/20 per cent.
Road Ahead
The rapidly globalising world is opening new dimensions for the transportation industry, generating need for
more efficient, safe and reliable modes of transportation.
Cars will become ‘smart devices on wheels’, so much so that the car will become an extension of your
smartphone or vice versa. Today, several companies – including Google and Apple – are working on connected
vehicles. By 2020, the industry estimates that nearly 90 per cent of vehicles on the road will be wired, while the
connected car market will hit US$ 600 billion – making it the single largest market for connected devices and
services. Experts predict that in future most of the additions to a car will be digital features rather than physical.

11. Disclaimer:
This document prepared by our research analysts does not constitute an offer or solicitation for the purchase or sale
of any financial instrument or as an official confirmation of any transaction. The information contained herein is
from publicly available data or other sources believed to be reliable but do not represent that it is accurate or
complete and it should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s affiliates shall
not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. This document is provide for assistance only and is not intended to be and must
not alone be taken as the basis for an investment decision.

12. Firstcall India Equity Research: Email – info@firstcallindia.com
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