9 EXIDEIND share price target reports by brokerages below. See what is analyst's view on EXIDEIND share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
EXIDE 1QFY21 results exceeded expectations at revenue/EBITDA/PAT as the weak volumes in auto OEMs was offset by better than expected growth in replacement segment. Going forward also we believe stronger growth in replacement segment (~65% of industry) coupled with recovery of industrial battery demand will offset subdued volumes from auto OEMs. Consequently, favorable mix along with benign RM should help ~50bp margin expansion in FY21 to 14.3%. We increase FY22 EPS by 3.6% to factor in for favorable mix while the same to reverse in FY23 leading to EPS cut by 3.3%. We expect organized players including EXIDE to see margin expansion (~100-1500bps in CV, tractor and motorcycle segment)) led by weakening competitive position of small regional/unorganized players. Hence, we upgrade stock to ‘BUY’ (from Accumulate) with revised price target of Rs183 (Rs177) based on 14x June-22 standalone EPS plus Rs21 value of insurance business. Stock trades at 13.7x/12.4x FY22/23 EPS.
EXID’s 4QFY20 results were in-line at EBITDA/PAT while revenues stayed low at Rs20.6bn (PLe Rs22.5b, ~20.9% YoY). The weak volumes in auto OEM was partially offset by continued growth in auto replacement and other industrial segment. We believe stronger growth in replacement segment (~65% of industry) post ease of lockdown coupled with recovery of industrial battery demand will offset subdued volumes from auto OEMs. Consequently, favorable mix along with benign RM should help ~120bp margin expansion in FY21 to 15%. We increase FY21/22 EPS by 7%/4.5% to factor in for better mix and decline in RM. We have also increased the multiple by a notch to 14x (from the earlier 13x) and maintain ‘Accumulate’ with a price target of Rs179 (Rs167) based on 14x Mar-20 standalone EPS plus Rs25 value of insurance business
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 by14.3%/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).
We expect Exide to benefit from: 1) further improvement in the replacement demand, given healthy primary sales in the past three years; 2) a market share gain from unorganized players, after GST implementation; 3) an uptick in the nascent e-rickshaws /solar battery segments; 4) the initiative to strengthen distribution network by introducing the sub-distributor model; and 5) the decline in lead prices (20% YoY), which will further raise margin. We expect a 21% YoY/ EPS CAGR over FY19-21E, driven by a 10% revenue growth (driven by replacement demand) and 120bps margin expansion (due to weak lead prices and measures to cut costs. We lower our multiple to 17x and maintain Buy, with SOTP-based TP of ` 242 (17x FY21E EPS + 1.5x Inv (` 30) for the insurance).
We interacted with EXID’s management on the side lines of AGM. The management elaborated how EXID would like to play EV landscape (through CV fleet segment, 2W and other industrial applications) and its preparedness (setting up 3 assembly lines of 250mw each for each of above segments) at an investment of INR2b (of which INR1b will get invested by Mar-20). Of the three, its 1st battery pack assembly line is expected to operational by the 3QFY20 while other two will be ready by Mar-20. On the lead acid front, EXID expects while automotive replacement demand would continue to grow 8- 10% in FY20-21, OEM demand will be under pressure in-line with current slowdown. However, industrial segment would continue grow at double-digit rate in FY20/21. We maintain ‘Accumulate’ with a price target of Rs209 (17xMar’21E standalone EPS plus value of insurance business value.
We believe that healthy growth momentum in auto replacement, industrial and exports segments would help contain weak OEM demand. We maintain “Accumulate” with a price target ofRs231, based on 19xMar’21E standalone EPS plus Rs30 for value of investments. The stock is currently trading at 19.3x FY20E and 18.9x FY21E standalone EPS.
We expect a 18% EPS CAGR over FY19-21E, primarily led by a 13% growth in revenue (+7% volume, 6% in ASP) and 20bps margin expansion, which is much higher than peers. However, this is discounted in the valuations (25x FY21E PE) at current levels. We recommend Sell, with TP ` 456 (based on 22x of FY21E earnings + value of TVS Credit Services at Rs 35/share)
Exide has a healthy balance sheet with surplus cash on its books and controlled working capital cycle (~60 days). This coupled with asset turnover of ~3x and stable EBITDA margins of ~14% results in robust ~18% RoCE. With replacement market aiding volume growth, we expect sales & PAT to grow at a CAGR of 6.3% & 5.5%, respectively, in FY19-21E. The company, however, trades at rich valuations amid technological disruption in the automobile battery space and muted growth prospects. Therefore, we downgrade the stock to REDUCE. We value it on SOTP basis at Rs 200, valuing the battery business at Rs 167 i.e. 15x P/E on FY21E EPS of | 11.1 and assigning Rs 33 to its stake in insurance business & smelting operations.
Going forward, company’s Cost Control measures and Technology up gradation strategies would help to improve the bottom-line. Also, tie up for batteries having lithium-ion cell tech- nology at its plant is expected to become operational by mid-2020 would add to improve company’s performance and lower the raw material cost to some extent. As, electric vehicles to be the next leg for growth combined with 2W growth expected to remain strong in the years to come due to increase in consumption & rural income. We remain positive for the sector and Exide industries to maintain its share in the market. However, continued escalation in lead prices remains a major concern. Adding to that, muted auto sales numbers and competition pressures are also pulling back the margins Estimating the share price of the company as per P/E valuation P/E of FY20 E at 23x , EPS (Est.) at `11.23, the estimated share price for next 1 year tenure turns around to be Rs 262. We recommend to BUY this script.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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