ICICI Direct is bullish on Exide Industries has recommended buy rating on the stock with a target price of Rs 230 in its research report dated November 07, 2019.
ICICI Direct's research report on Exide Industries
Exide Industries (EIL) reported a relatively healthy set of Q2FY20 numbers. Net sales were at Rs 2,611 crore, down 4% YoY. EBITDA at Rs 367 crore was up 10.4% YoY with corresponding EBITDA margins at 14.1% (contracting 60 bps QoQ). EIL realised 71 bps gross margin expansion. However, negative operating leverage explained the sequential slide in overall operating margins. Consequent PAT came in at Rs 237.3 crore, down 11.6% YoY. EIL declared an interim dividend of Rs 1.6 per share for FY20E.
We expect sales and PAT to grow at a CAGR of 8.2% and 13.3%, respectively, in FY19-21E. We maintain our BUY rating, with an unchanged (SOTP-based) target price of Rs 230 (battery business at Rs 180 i.e. 14x P/E on FY21E EPS of Rs 12.7; Rs 50 for insurance business & smelting operations).
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