Extending losses Exide Industries has slipped further to around 3.5% on BSE after the Bank of America -Merrill Lynch downgaded the company's stock to 'neutral' citing erosion of pricing power and growing strength of main rival Amara Raja Batteries Ltd.
The company's performance in July-September quarter for 2015 fiscal came below market expectations mainly on account of decline in operating margin because of an increase of around 26% in overall expenses compared to the same quarter last fiscal.
Expense for the company rose on account of increase in lead prices and higher outgo on wages. The company is also facing stiff resistance from its main competitor Amara Raja Batteries Ltd. across all product segments.
Battery maker Exide Industries has posted a 6.01% rise in its net profit to Rs 125.76 crore in the second quarter ended September 30, 2014 as compared to the same quarter previous fiscal. During the period the company clocked net sales of Rs 1761.32 crore, a jump of 23.35% over the corresponding quarter of previous fiscal.
"Though no significant improvement in demand for both automotive and industrial battery was experienced during the quarter, encouraging growth in our automotive and motorcycle replacement battery sale as well as improved telecom business and UPS battery business resulted in improved performance," Exide MD and CEO PK Katkay said in a statement.
The stock opened at Rs 158 and hit a low of Rs 154 so far.
