Titan Q2 results

Titan Q2 Results Preview: Revenue Likely to See Double-Digit Growth Aided by Jewellery Business

Exide Industries, a major player in the battery manufacturing industry, reported a mixed set of financial results for Q2 FY 2024-25. The company experienced a 13.6% decline in its consolidated net profit, which stood at ₹233.4 crore compared to ₹270.32 crore in the same quarter last year. However, revenue from operations rose slightly, increasing by 1.79% to reach ₹4,450 crore, up from ₹4,371.52 crore in the corresponding period last fiscal year.

Key Financial Highlights

• Net Profit: Down 13.6% YoY to ₹233.4 crore from ₹270.32 crore in Q2 FY 2023-24.
• Revenue Growth: Revenue from operations increased 1.79% YoY to ₹4,450 crore.
• Total Income: Up 1.8% YoY to ₹4,490.25 crore.
• EBITDA and Margins: EBITDA fell 5.5% YoY to ₹472 crore, while the EBITDA margin decreased by 80 basis points to 10.6%.
• Share Price Performance: Exide Industries’ share price was down 2.9% at ₹445.6 on the NSE and ₹445.5 on the BSE. The stock has declined 9.77% in the past month but has gained 39% year-to-date.

Investment in Subsidiary and Lithium-Ion Project

Exide Industries has invested heavily in its subsidiary Exide Energy Solutions Limited (EESL), which focuses on lithium-ion cell manufacturing. As of October 2024, the company’s total equity investment in EESL reached ₹2,852.24 crore, including a recent ₹250 crore investment in Q2 and an additional ₹100 crore in October. EESL is actively progressing with its lithium-ion cell manufacturing project, with main building construction, mechanical installations, and equipment setup currently underway.

Management’s Perspective

Avik Roy, MD and CEO of Exide Industries, highlighted the company’s stable operating performance amid high commodity prices. He attributed this stability to efficient procurement and cost optimization initiatives. Looking ahead, Roy expressed a positive near-term business outlook, noting that easing commodity prices could further support profitability.

Advantages of Exide Industries’ Performance

1. Stable Revenue Growth: Despite challenges, Exide has managed to grow its revenue, showing resilience in its business operations.
2. Strategic Investments in Lithium-Ion Technology: The investment in EESL and lithium-ion technology aligns with the global shift toward electric mobility and renewable energy storage solutions, positioning Exide well for future demand.
3. Cost Optimization Efforts: Exide has implemented cost control measures and efficient procurement strategies, contributing to operational stability.
4. Positive Market Outlook: Management’s positive outlook and easing commodity prices suggest potential profitability improvements in the coming quarters.

Disadvantages of Exide Industries’ Performance

1. Decline in Net Profit: The 13.6% drop in net profit reflects challenges in maintaining profitability, likely due to high costs and market competition.
2. Decreased Margins: The decline in EBITDA margins by 80 bps indicates potential cost pressures and reduced operational efficiency.
3. Stock Price Volatility: Exide’s stock has seen a recent decline, and short-term volatility could impact investor sentiment.
4. Dependence on Commodity Prices: While easing prices could aid profitability, Exide’s performance remains vulnerable to fluctuations in commodity costs.

Conclusion

Exide Industries has demonstrated resilience with steady revenue growth and strategic investments, particularly in lithium-ion technology, to align with future industry trends. However, the company faces profitability challenges, reflected in reduced margins and a significant drop in net profit. The positive outlook for commodity price stabilization could support Exide’s performance in the near term, and its continued focus on lithium-ion battery development positions it well for growth in the evolving energy landscape.

FAQs

1. What was Exide Industries’ revenue for Q2 FY 2024-25?
   • Exide Industries reported revenue of ₹4,450 crore for Q2 FY 2024-25, marking a 1.79% YoY increase.
2. How much did Exide’s net profit decline in Q2?
   • Exide Industries’ net profit declined by 13.6% YoY to ₹233.4 crore.
3. What recent investments has Exide made in its subsidiary EESL?
   • Exide invested ₹250 crore in Exide Energy Solutions Limited during Q2, with an additional ₹100 crore in October, bringing its total investment to ₹2,852.24 crore.
4. How did Exide Industries’ stock perform in Q2?
   • Exide’s stock declined 2.9% on both NSE and BSE on the latest trading day, and it has decreased by 9.77% in the past month, although it has gained 39% year-to-date.
5. What is Exide’s management’s outlook on profitability?
   • Exide’s management is optimistic about the near-term outlook, noting that easing commodity prices and continued cost optimization efforts could support profitability.

Titan Q2 results

Exide Industries Q2 Results: Net Profit Falls by 13.6% to ₹233.4 Crore, Revenue Grows by 2%