Re: {LONGTERMINVESTORS} Exide Industries - thread
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RAJESH DESAI
Sep 6, 2012, 12:42:15 AM9/6/12
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Exide Industries wins 15-year trademark spat against global battery giant Exide Technologies
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CA. Rajesh Desai
On Tue, Aug 28, 2012 at 12:08 PM, kuku manmohan <manmoh...@gmail.com> wrote:
Nomura puts a buy on Exide Industries
Nomura has upgraded the rating of Exide Industries to 'Buy' and set a target price of Rs 170. HSBC estimate Exide will report an 18% revenue CAGR over the next two years. Its auto segment should be driven by the replacement of batteries for cars sold during FY09-11, when volumes increased at a 27% CAGR. The industrial segment to pick up as the power shortage situation has worsened versus that of last year, due to policy inaction. Exide stock has corrected by 18% over the last year due to lower replacement demand in the auto sector from the 2008 crisis period and some market share losses, and weak power inverter demand as the power supply situation had improved in FY12.
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Manmohan Tandan
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CA. Rajesh Desai
RAJESH DESAI
Sep 6, 2012, 5:06:20 AM9/6/12
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6 Sep, 2012, 01.42PM IST, ET Now
In a chat with ET Now, Ambareesh Baliga, Market Expert, shares his views on Exide Industries.
ET Now: Give us one pick that you would recommend the investors to buy from a 6-month to a 1-year perspective.
Ambareesh Baliga: One stock that I have recommended in the past also is Exide Industries, which is basically into the replacement market. That is the big story going ahead among the auto ancillaries where we see the demand really booming going ahead if you are talking of the next year and a half, two years. So this is one stock which I am recommending.
ET Now: You mentioned about the replacement market. If you look at the stock price of Exide, it is corrected over the last one year due to lower replacement demand. What is the outlook going forward on that?
Ambareesh Baliga: If you look at the number of vehicles which have been sold between 2008 and 2011, that has been a record even if you look at the history. So these vehicles will come up for replacement of batteries. So that is the demand which I see going ahead because normally a battery last for about 3 to 4 years. So that replacement demand will come in the next 1 or 2 years and generally the margins in the replacement market is much higher than OEMs. That will help improve the margins for Exide and at the same time in the past few months, we have seen the lead prices also correcting which is one of the issues for Exide. So with this issue also being taken care of, we clearly see the margins improving.
ET Now: Taking about the financials, what about the margin growth and what kind of bottom line growth do you expect Exide to post?
Ambareesh Baliga: On margin front, in fact, we see at least 150-200 basis point improvement basically because of the lead prices going down and with their refining capacity also improving. At the same time if you are talking of the EPS, we are looking at an EPS of about 7.75 for FY13 and about 9.4 to 9.5 for FY14.
ET Now: Is there any downside risk to the recommendation that you like to tell investors?
Ambareesh Baliga: Downside risk in terms of price, I suppose we could see levels of 120-125. I do not really see the stock going much below that unless of course you have a surprise move in the lead prices and they shoot through the roof like what we have seen in the last year. I do not see any other risk as such for the time being.
ET Now: If you do not see too much of a downside risk, what is the target price and the timeframe with regards to this target price for Exide?
Ambareesh Baliga: The target price for Exide would be about 165-170 within a timeframe of about 4 to 6 months but if one is willing to hold on for a year plus, I will not be surprised if we see levels of about 195-200.
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CA. Rajesh Desai
Buy Exide Industries with a target of Rs 165-170 in 4-6 months: Ambareesh Baliga
In a chat with ET Now, Ambareesh Baliga, Market Expert, shares his views on Exide Industries.
ET Now: Give us one pick that you would recommend the investors to buy from a 6-month to a 1-year perspective.
Ambareesh Baliga: One stock that I have recommended in the past also is Exide Industries, which is basically into the replacement market. That is the big story going ahead among the auto ancillaries where we see the demand really booming going ahead if you are talking of the next year and a half, two years. So this is one stock which I am recommending.
ET Now: You mentioned about the replacement market. If you look at the stock price of Exide, it is corrected over the last one year due to lower replacement demand. What is the outlook going forward on that?
Ambareesh Baliga: If you look at the number of vehicles which have been sold between 2008 and 2011, that has been a record even if you look at the history. So these vehicles will come up for replacement of batteries. So that is the demand which I see going ahead because normally a battery last for about 3 to 4 years. So that replacement demand will come in the next 1 or 2 years and generally the margins in the replacement market is much higher than OEMs. That will help improve the margins for Exide and at the same time in the past few months, we have seen the lead prices also correcting which is one of the issues for Exide. So with this issue also being taken care of, we clearly see the margins improving.
ET Now: Taking about the financials, what about the margin growth and what kind of bottom line growth do you expect Exide to post?
Ambareesh Baliga: On margin front, in fact, we see at least 150-200 basis point improvement basically because of the lead prices going down and with their refining capacity also improving. At the same time if you are talking of the EPS, we are looking at an EPS of about 7.75 for FY13 and about 9.4 to 9.5 for FY14.
ET Now: Is there any downside risk to the recommendation that you like to tell investors?
Ambareesh Baliga: Downside risk in terms of price, I suppose we could see levels of 120-125. I do not really see the stock going much below that unless of course you have a surprise move in the lead prices and they shoot through the roof like what we have seen in the last year. I do not see any other risk as such for the time being.
ET Now: If you do not see too much of a downside risk, what is the target price and the timeframe with regards to this target price for Exide?
Ambareesh Baliga: The target price for Exide would be about 165-170 within a timeframe of about 4 to 6 months but if one is willing to hold on for a year plus, I will not be surprised if we see levels of about 195-200.
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CA. Rajesh Desai
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