Why Did Exide Industries Experience an 11% Profit Drop?
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Synopsis
Exide Industries has reported an 11% dip in profits for Q4 FY25. Despite increased revenues, rising costs have impacted margins. What's next for the company as it plans significant investments in future projects? Find out more about their financial performance and future strategies.
Key Takeaways
- 11% decline in net profit for Q4 FY25.
- Revenue rose 4% to Rs 4,159.42 crore.
- EBITDA fell to Rs 467 crore.
- EBITDA margin dropped to 11.2%.
- Investment of up to Rs 1,200 crore in Lithium-ion cell manufacturing.
New Delhi, April 30 (NationPress) Exide Industries announced on Wednesday an 11% decrease in its net profit for the March quarter (Q4 FY25), reporting a net profit of Rs 254.60 crore compared to Rs 283.75 crore during the same quarter of the previous fiscal year.
This profit decline occurred despite a slight 4% rise in revenue from operations, which increased to Rs 4,159.42 crore from Rs 4,009.39 crore in the corresponding period last year, as stated in the company's exchange filing.
The company's EBITDA for the quarter was recorded at Rs 467 crore, falling short of the Rs 516 crore reported in the same quarter of the prior financial year.
The EBITDA margin dropped to 11.2% due to escalating raw material costs, particularly antimony, which notably affected profit margins over the last six months.
For the entire financial year ending March 2025, Exide highlighted a 3% increase in profit after tax, amounting to Rs 1,077 crore.
The company continues to maintain a robust liquidity status with zero debt and strong cash flows, with cash flow from operations for FY25 reaching Rs 1,298 crore.
During the March quarter, demand in the replacement market for both two-wheelers and four-wheelers remained robust, leading to double-digit growth in the mobility sector.
The industrial UPS segment benefitted from heightened demand for power backup solutions, while the solar division saw double-digit growth propelled by solarisation initiatives.
However, the home-UPS sector faced challenges due to a sluggish season and an elevated base, while the automotive OEM segment was negatively affected by reduced demand from vehicle manufacturers.
The industrial infrastructure business showed an improvement in the fourth quarter, driven by better order inflow and execution, particularly in domains like power, railways, and traction.
Looking forward, the company's board has sanctioned an additional investment of up to Rs 1,200 crore in its wholly-owned subsidiary, Exide Energy Solutions Limited (ESSL).
This investment aims to facilitate the establishment of a greenfield multi-gigawatt Lithium-ion cell manufacturing plant in India.
Point of View
I believe Exide Industries' performance reflects broader market challenges, including rising material costs and fluctuating demand. Their strategic investments hint at a commitment to innovation and growth in a competitive landscape. It's crucial for stakeholders to watch how these developments unfold.
NationPress
24/05/2025
Frequently Asked Questions
What caused the decline in Exide Industries' profit?
The decline was primarily due to increasing raw material costs, particularly antimony, which significantly affected profit margins.
What is the EBITDA margin for Q4 FY25?
The EBITDA margin for Q4 FY25 slipped to 11.2%.
How much is Exide investing in its subsidiary?
Exide has approved an investment of up to Rs 1,200 crore in its wholly-owned subsidiary, Exide Energy Solutions Limited.
Did Exide Industries see a revenue increase?
Yes, Exide reported a 4% increase in revenue from operations, rising to Rs 4,159.42 crore.
How did the mobility business perform?
The mobility business experienced double-digit growth due to strong demand in the replacement market for two-wheelers and four-wheelers.
