Exide Industries, the Rs 954-crore storage battery maker, today reported a 48 per cent fall in net profit for the first quarter ended June 30, 2001.
The company reported a net profit of Rs 3.6 crore for the first quarter on net sales Rs 176 crore, as against a net profit of Rs 7 crore on net sales of Rs 158 crore in the corresponding period last fiscal.
Earnings per share for the first quarter declined to Rs 1 from Rs 1.75 last year.
Also Read
The company attributed the decline in profitability to lower sales of automobile batteries following dumping by Bangladesh, Thailand, Taiwan and Saudi Arabia.
"Dumping has shut out Indian companies from the replacement market at a time when demand from new car makers has gone flat and tractor sales have declined 36 per cent, resulting in a crisis in the battery sector," Exide chairman and chief executive officer, S B Ganguly said.
However, the prices of lead, a major cost component in batteries, has remained stable.
"We have been lucky that lead prices and other costs have remained stable during the quarter, helping the battery industry to keep its head above water," Ganguly said.
To ward off threats of cheap imports, the Association of Indian Battery Manufacturers has already moved the anti-dumping wing of the Union commerce ministry to levy anti-dumping duty on auto batteries from the four identified countries.
The Anti-Dumping Authority has imposed such a duty on auto batteries from China, Japan and South Korea recently in response to a similar complaint from battery companies.
The industrial batteries segment has reported a growth in volumes. But margins have been under pressure. Higher exports, lower dumping and new orders for submarine batteries would boost the bottomline in the following quarters, said the company.
Exide is the market leader in the storage batteries industry and has been pioneering concepts like electricity powered vehicles and solar-powered facilities at various locations in the country. These efforts are likely to continue as they represent forward integration for the company.