Dolat Capital is bullish on Exide Industries has recommended buy rating on the stock with a target price of Rs 277 in its research report dated April 30, 2019.
Dolat Capital's research report on Exide Industries
Exide’s 4QFY19 results were ahead of our estimates. The net revenue was ` 26bn (+6% YoY), due to higher automotive (especially from the replacement segment) and industrial battery sales. The EBITDA was ` 3.73bn (+10%YoY) with expanded margin at 14.4% (+62bps YoY), due to a fall in lead prices, a better product mix, and cost control measures. The APAT grew 11% YoY to ` 2.10bn.
Outlook
We expect a 21% EPS CAGR over FY19-21E led by 13% revenue growth (driven by replacement demand) and 70bps margin expansion (due to weak lead prices and measures to cut costs). We recommend a Buy, with SOTP-based TP of ` 277 (20x FY21E EPS + 2x Inv (` 37) for the insurance).
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