Prabhudas Lilladher recommended accumulate rating on Exide Industries with a target price of Rs 218 in its research report dated November 06, 2019.
Prabhudas Lilladher's research report on Exide Industries
EXID's 2QFY20 revenues were in-line at Rs26.1b (-4% YoY and -6% QoQ). The weak volumes in auto OEM and telecom segment was offset by continued growth in replacement, UPS, Solar and other industrial segment. Gross margins expanded 70bp QoQ (310bp YoY) at 36.2% (PLe 33.7%) led by soft RM and favorable product mix. However, this was partially offset by higher other expense at 15.5% (PLe 14.3%, +80bp YoY). Better operating performance and lower tax rate at 15.6% (PLe 32.5%) drive adjusted PAT growth by 30.8% YoY at Rs2.4bn (PLe Rs1.7bn). We increase FY20/21 EPS by 14.3%/6% to factor in for lower RM and tax rate. We maintain 'Accumulate' with a price target of Rs218 (earlier Rs208) based on 17x Sep'21E standalone EPS plus value of insurance business vertical).
Going ahead, continued growth in replacement and industrial segment to cushion weak auto OEM sales. We increase FY20/21 EPS by 14.3%/6% to factor in for lower RM and tax rate. We maintain 'Accumulate' with a price target of Rs218 (earlier Rs208) based on 17x Sep'21E standalone EPS plus value of insurance business value).
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