CFR PROJECT Report Final

7/23/2019 CFR PROJECT Report Final

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CFR PROJECT

Mohit Gupta 197/50

Paras Gupta 231/50

Smit Patel 235/50

Kuldeep Martolia 173/50

Shitij Bumnavat 238/50


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INDEX

Topics Page No.

Exide Industries 3

Competitors 4

Consolidated Financial Statements - Exide Industries 5-7

Interpretation of Financial Statement 8

Accounting Policies 8

Additional Financial Details - Exide Industries 10

Trend Analysis 11

Financial 1

Performance mapping with competitors


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Company name: EXIDE INDUSTRIES

Competitors: Amara Raja Batteries, Amtek India

EXIDE INDUSTRIES

MD & CEO : P K Kataky

Chairman : R G Kapadia

Listed: BSE & NSE

Background

Exide Industries is a storage battery producing company in India. It manufactures

automotivelead-acid batteries. It has plants inIndia andSri Lanka. The company wasincorporated as Associated Battery Makers (Eastern) Ltd., on 31 January 1947under the

Companies Act, 1913. It had the objective to purchase all or any of the assets of

manufacturers, buyers, sellers, dealers and repairers of electrical and chemical goods and

appliances under the name Chloride Electric Storage Company (India) Ltd. The name of the

company was changed to Chloride India Ltd.on 2 August 1972. The name of the company

was again changed to Chloride Industries Ltd. via fresh Certificate of Incorporation dated 12

October 1988. The company was further changed to Exide Industries Ltd. on 25 August

1995.

The company manufactures the widest range of storage batteries in the world from 2.5 Ah

to 20,400 Ah capacity, covering the broadest spectrum of applications. The company has sixfactories located across the countrytwo inMaharashtra,two inWest Bengal - Shamnagar

(Mother plant) & Haldia, one inHosur,Tamil Nadu and one inHaryana. The companys

predecessor carried on their operations as import house from 1916 under the name

Chloride Electrical Storage Company. Thereafter, the company started manufacturing

storage batteries in the country and have grown to become one of the largest

manufacturer and exporter of batteries in the sub-continenttoday. Exide separated from

its UK-based parent, Chloride Group Plc., in 1989, after the latter divested its ownership in

favour of a group of Indian shareholders.

Presently it owns the brands like EXIDE, CHLORIDE, INDEX, DYNEX, Standard Furukawa,

JUPITER, CONREX. Exide Industries Limited, India's flagship of the storage battery industry-

is also the largest Power Storage Solutions Company in South and South East Asia.

Collaborations with Shin Kobe and Furukuwa of Japan and Oldham of UK give it a global

dimension in manufacturing capability. The company has subsidiaries in the UK, Singapore

and Sri Lanka. Exports span 18 countries across five continents in a growing list of overseas

customers.
http://en.wikipedia.org/wiki/Lead-acid_batteryhttp://en.wikipedia.org/wiki/Lead-acid_batteryhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Sri_Lankahttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/West_Bengalhttp://en.wikipedia.org/wiki/Hosurhttp://en.wikipedia.org/wiki/Tamil_Naduhttp://en.wikipedia.org/wiki/Haryanahttp://en.wikipedia.org/wiki/Haryanahttp://en.wikipedia.org/wiki/Haryanahttp://en.wikipedia.org/wiki/Tamil_Naduhttp://en.wikipedia.org/wiki/Hosurhttp://en.wikipedia.org/wiki/West_Bengalhttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Sri_Lankahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Lead-acid_battery


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COMPETITORS

1. AMARA RAJA BATTERIES

MD : Jayadev Galla

Chairman : Ramachandra N Galla

Listed: BSE & NSE

Background

A first generation entrepreneur, Dr.Ramachandra Naidu Galla is the founder of Amara Raja

Group Of Companies in 1985. The automotive batteries business unit commenced

operations in 2001 with technology from Johnson Controls Inc., - joint venture partner and

the worlds largest manufacturer of automotive batteries. It pioneered the introduction of

Zero maintenance technology in Indias automotive battery segment, the key differentiator

in an otherwise cluttered Indian automotive battery market.

2. AMTEK INDIA

MD : Gautam Malhotra

Chairman : Arvind Dham

Listed: BSE & NSE

Background

Amtek Auto Group, comprised of Amtek Auto, Amtek India and Ahmednagar Forgings, isone of the largest integrated component manufacturers in India, with a strong global

presence. It has 43 world class manufacturing facilities located in India (39) and Europe (4).

With the infrastructure and technology platform developed over 25 years, the Group is well

positioned in the Indian Auto and Non-Auto component markets.

INDUSTRY OUTLOOK

Despite new types of batteries being developed, the market for lead-acid batteries is

expected to exhibit strong growth in the next five years, according to a new market research

report by market consulting solutions firm Netscribes. The new report, 'Lead-Acid Battery

Market in India," states that the battery market in India is experiencing rising demand from

various sectors, thereby providing immense opportunities to manufacturers to grow and

operate in the market lucratively. Steadily growing automobile sector and rising need for

power backup is primarily aiding growth in the lead-acid battery market. The replacement

market for batteries has also been growing considerably and is mostly served by smaller

firms. They function mostly in the semi-urban and rural areas, catering to the battery needs

of old automobiles, tractors and other farm equipment. The need for uninterrupted power

in various industries such as telecom, banking and hospitality has resulted in the strong

growth of industrial batteries. Another area from where the market has been facing high

demand is the renewable energy market where batteries are required to store the energy

generated from renewable sources.
http://en.wikipedia.org/wiki/Ramachandra_Naidu_Gallahttp://en.wikipedia.org/wiki/Ramachandra_Naidu_Galla


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Consolidated Balance Sheet

Exide Industries Ltd

Industry :Auto AncillariesBatteries

Price (Rs in Crs)Year Mar 13 Mar 12 Mar 11 Mar 10 Mar 09 Mar 08

SOURCES OF FUNDS :

Share Capital 85 85 85 85 80 80

Reserves Total 2,994.6 2,602.3 2,300.0 1,831.5 912.89 766.63

Equity Share Warrants 0 0 0 0 0 0

Equity Application Money 0 0 0 0 0 0

Total Shareholders Funds 3,079.6 2,687.3 2,385.0 1,916.5 992.89 846.63

Minority Interest 11.16 12.5 10.7 36.62 17.83 8.05

Secured Loans 48.61 24.52 98.29 81.6 220.77 295.93

Unsecured Loans 2.38 2.58 5.34 92.53 140.27 80.13Total Debt 50.99 27.1 103.63 174.13 361.04 376.06

Policy Holders Fund 6,237.8 0 0 0 0 0

Other Liabilities 53.73 23.67 52.81 0 0 0

Total Liabilities 9,433.3 2,750.6 2,552.2 2,127.2 1,371.7 1,230.7

APPLICATION OF FUNDS :

Gross Block 2,748.4 1,961.1 1,732.1 1,487.3 1,391.7 1,177.8

Less: Accumulated Depreciation 1,071.2 856.86 764.58 693.52 618.14 566.17

Less: Impairment of Assets 0 0 0 0 0 0

Net Block 1,677.2 1,104.2 967.56 793.79 773.64 611.71

Lease Adjustment 0 0 0 0 0 0Capital Work in Progress 60.77 27.39 51.81 42.93 19.77 47.14

Producing Properties

Investments 4,021.3 993.45 861.32 876.79 275.93 256.2

Current Assets, Loans & Advances

Inventories 1,407.3 1,157.5 1,134.3 796.86 524.24 640.38

Sundry Debtors 591.81 426.05 373.46 298.05 265.74 291.77

Cash and Bank 220.51 62.79 22.83 30.14 38.96 7.67

Loans and Advances 845.78 85.88 118.62 85.62 47.05 46.75

Total Current Assets 3,065.4 1,732.3 1,649.2 1,210.6 875.99 986.57

Less : Current Liabilities and ProvisionsCurrent Liabilities 1,588.4 931.47 842.64 624.68 418.26 510.61

Provisions 183.24 153.62 97.61 111.93 112.13 110.88

Total Current Liabilities 1,771.6 1,085.0 940.25 736.61 530.39 621.49

Net Current Assets 1,293.8 647.22 708.97 474.06 345.6 365.08

Deferred Tax Assets 16.09 16.73 15.66 13.42 25.33 13

Deferred Tax Liability 119.75 103.6 86.15 73.74 68.51 62.39

Net Deferred Tax -103.66 -86.87 -70.49 -60.32 -43.18 -49.39

Other Assets 2,483.8 65.17 33.05 0 0 0

Total Assets 9,433.3 2,750.6 2,552.2 2,127.2 1,371.7 1,230.7

Contingent Liabilities 314.45 183.87 111.79 74.31 16.95 16.45


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Exide Industries Ltd

Industry :Auto Ancillaries - Batteries

(Rs in Crs)

13-Mar 12-Mar 11-Mar 10-Mar 9-Mar 8-Mar

Cash Flow Summary

Cash and Cash Equivalents at Beginning of the

year 62.79 22.83 30.14 38.96 7.67 3.79

Net Cash from Operating Activities 399.21 602.34 447.72 534.08 500.51 178.25

Net Cash Used in Investing Activities -86.3 -333.01 -240.63 -791.19 -321.93 -291.25

Net Cash Used in Financing Activities -155.19 -229.37 -214.4 248.29 -147.29 116.88

Net Inc/(Dec) in Cash and Cash Equivalent 157.72 39.96 -7.31 -8.82 31.29 3.88

Cash and Cash Equivalents at End of the year 220.51 62.79 22.83 30.14 38.96 7.67


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INTERPRETATION OF FINANCIAL STATEMENT

1. Balance Sheet As we can see in the Balance Sheet, Reserves Total have been increasing with time

which justifies the constant increment in the Cash &Cash equivalents account. It alsoresults in constant increase in stockholder's equity.

Total debt has decreased 85%from INR 361 Crs in 2008 to INR 51 Crs in 2013.

Investments have increased 305%from INR 993 Crs to INR 4021 Crs last year.

Policy holders fund was creditedwith INR 6237 Crsin 2013.

Inventories amount is constantly increasing with time.

2. Cash flow

The negative cash flow in 'cash from investing and financing activities' has come

from the 'cash from operating activities'.

More inventories are bought and more selling of investment is observed ascompared to previous year.

Increasing trend in purchase of investment is also observed.

There is also net increment in interest and dividend received, with this INR 24 Crs of

long term borrowing is also undertaken by the company. Therefore we can say that

company has stopped obtaining positive cash from financing activities and using its

operation income in buying the investments and running the financial operation.

3. Profit & Loss Statement

21.744% increase at a higher rate compared to previous years.

22.3178% High increase in total income due to high increase in net sales Raw material Cost has increased by 21.85%.

23.50% Increase in total expendituredue to Higher raw material cost which increase

no of Inventories

ACCOUNTING POLICIES

1. Sale of Goods

Revenue from sale of goods including manufactured products is recognised upon

passage of title to the customers, in accordance with the Sale of Goods Act ,1930.

Customs Duty benefits in the form of advance license entitlements are recognised on

export of goods, and are set off from materials cost.

2. Investments

Long Term Investments are considered at cost, unless there is other than temporary

decline in value thereof, in which case adequate provision is made for diminution in

the value of investments.

3. Depreciation

The Company has estimated the residual value of Plant & Machinery, moulds and

computers to be 2% of the cost as against 5% specified in Section 205 (2)(c ) of the

Companies Act, 1956. Accordingly, 98% of the value of fixed assets is beingdepreciated in the accounts.


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In case of impairment, if any, depreciation is provided on the revised carrying

amount of the assets over its remaining useful life.

4. Foreign Currency Conversion:

Foreign currency monetary items are reported using the closing rate. Non-monetaryitems which are carried in terms of historical cost denominated in a foreign currency

are reported using the exchange rate at the date of the transaction; and non-

monetary items which are carried at fair value or other similar valuation

denominated in a foreign currency are reported using the exchange rates that

existed when the values were determined.

5. Inventories:

Materials and other items held for use in the production of inventories are not

written down below cost if the finished products in which they will be incorporated

are expected to be sold at or above cost.

6. Borrowing Costs:

All direct capital expenditure on expansion are capitalised. As regards indirect

expenditure on expansion, only that portion is capitalised which represents the

marginal increase in such expenditure involved as a result of capital expansion. Both

direct and indirect expenditure are capitalised only if they increase the value of the

asset beyond its original standard of performance.

7. Retirement and other employee benefits:

Long term compensated absences are provided for based on an actuarial valuation

made at the end of each financial year.

Payments made under the Voluntary Retirement Scheme are charged to Statement

of Profit and Loss.


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Exide Industries Limited

ADDITIONAL FINANCIAL DETAILS

Rs. in Crs.

2012-13 2011-12 2010-11 2009-10 2008-09

ProfitabilityNet Sales 6365.89 5315.65 4766.08 4399.86 3798.80

Net Income 549.52 446.20 586.58 493.43 190.40

Assets 9433.38 2750.60 2552.22 2127.25 1371.76

Avg total Assets 6091.99 2651.41 2339.74 1749.51 1301.25

Total Shareholders Funds 3079.69 2687.33 2385.08 1916.50 992.89

Sales growth 19.75 11.53 8.32 15.82 15.25

PBIDTA Margin 14.31 14.85 22.29 22.50 15.53

PBDTA Margin 14.12 14.50 21.96 22.02 13.79

PBIT Margin 12.39 12.82 20.41 20.51 13.64

PBT Margin 12.21 12.47 20.08 20.03 11.90Net Profit Margin 8.48 8.74 13.84 13.20 7.75

Return on Assets 225.47 420.71 626.32 704.77 365.63

Return on Equity 229.98 429.12 645.11 740.01 471.66

Dupont Breakdown

Net Profit Margin 8.63 8.39 12.30 11.21 5.01

x Total Asset Turnover 26.12 50.12 50.92 62.87 72.98

= Return on Assets 225.47 420.71 626.32 704.77 365.63

x Total Leverage 1.02 1.02 1.03 1.05 1.29

= Return on Equity 229.98 429.12 645.11 740.01 471.66

Evaluating Risk to Income

Degree of Operating Risk 1.14 1.13 1.08 1.07 1.01

Degree of Financial Risk 1.02 1.03 1.02 1.02 1.15

Degree of Total Risk 1.16 1.16 1.09 1.10 1.16

Leverage

Interest Coverage 2.23 2.42 2.31 2.82 2.61

Debt to Equity Ratio 1.22 1.12 0.88 0.47 0.53

Share price 130.05 148.90 140.35 119.95 41.25

Book Value 35.76 31.12 27.54 21.98 11.76

P/E ratio 21.35 28.52 18.74 17.98 11.52

EPS 6.09 5.22 7.49 6.67 3.58

Liquidity and Solvency

Current Assets 3065.49 1732.31 1649.22 1210.67 875.99

Current Liability 1771.67 1085.09 940.25 736.61 530.39

Current Ratio(liquidity) 1.73 1.60 1.75 1.64 1.65

Current Ratio 2.73 2.89 3.44 2.96 3.33

Quick Ratio 2.43 0.53 0.49 0.51 0.59

Cashflow Yield 0.72 1.34 0.76 0.9 2.62

Cashflow to Sales 0.06 0.11 0.09 0.12 0.13

Cashflow to Assets 0.07 0.23 0.19 0.31 0.38


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Efficiency

Working Capital Turnover 6.56 7.84 8.06 10.74 10.69

PP&E Turnover 6.44 6.22 6.88 8.69 8.39

sundry debtors 591.81 426.05 373.46 298.05 265.00

inventory turnover 6.44 6.22 6.88 8.69 8.39Avge Inventory Holding Period 56.68 58.68 53.05 42.00 43.50

Avge Days to Pay Payables 24.24 24.73 22.48 19.51 21.13

debtors turnover 15.06 14.76 16.24 18.71 17.27

Asset turnover 1.04 2.00 2.04 2.51 2.92

Receivable's Turnover 12.51 13.30 14.20 15.61 13.63

Days Sales uncollectable 29.18 27.45 25.71 23.39 26.78

Operating Cycle 85.86 86.13 78.77 65.39 70.29

Leverage

Interest Coverage 2.23 2.42 2.31 2.82 2.61

Debt to Equity Ratio 1.22 1.12 0.88 0.47 0.53Some Additional Details

Dividend Payout Ratio 0.247 0.286 127.50 84.73 48.27

purchase of assets -172.20 -210.45 -294.88 -130.30 -179.04

sale of assets 1.30 1.03 59.74 1.03 4.49

depreciation 122.00 108.37 89.59 87.53 71.97

Capex 48.90 101.05 145.55 41.74 102.58

TREND ANALYSIS (USING FIVE YEARS DATA)

From 2008-09 CompanyNet Profit Margin has increased 78.58%in 2010-11. Then we have

observed the decrease of 36.84% and 2.97% in years 2011-12 and 2012-13 respectively.

8.48

8.74

13.84

13.20

7.75

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

2012-13 2011-12 2010-11 2009-10 2008-09

Net Profit Margin


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Asset Turnover, Inventory Turnover and A/R turnover has been decreasing consistently.

24.96%, 23.24% and 64.38% decrease is observed in the last five yearsin the values of

asset turnover, inventory turnover and A/R turnover respectively.

ROA and ROE increased 92.75% and 63.86% respectively in 2009-10 from its 2008-09

values. Then there is a fall of 73.4% and 68.01%respectively showing that the returns are

not increasing in proportion to its stock holder equity during the period 2009-2013.

1.042 2.04

2.512.92

6.44 6.22

6.88

8.69

8.39

10.76

12.48

12.76

14.76

14.34

0

2

4

6

8

10

12

14

16

2012-13 2011-12 2010-11 2009-10 2008-09

Asset Turnover

Inventory Turnover

A/R Turnover

9.02

16.83

25.07

28.20

14.63

19.06

17.59

27.27

33.92

20.70

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

2012-13 2011-12 2010-11 2009-10 2008-09

Return on Assets

Return on Equity


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Companys debt to equity ratio is increased from 0.53 to 1.22 in five years making its

position more financial vulnerable. Book/market value remained in the range 0.2-0.3 during

this period. It shows that its stock is overvalued in the market.

QUARTERLY FINANCIAL RESULTS

Comparing the quarterly performance we found the 4.78%, 6.33%, 17.41% and 29.44% increase in

net sales when compared with the same quarter previous year.

1.22

1.12

0.88

0.47

0.53

0.27

0.21

0.20

0.18

0.29

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2012-13 2011-12 2010-11 2009-10 2008-09

Debt to Equity Ratio

Book/Market

13-14 : 2013-2014

12-13 : 2012-2013

11-12 : 2011-2012


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8.54%, 3.26%, 2.52%, 105.01% of increase in PBIDTobserved in the quarters compared with their

previous year values.

As can be seen in the above graphs, there was a consistent increase in the Net Sales and

PBIDT (compared Q on Q). Net Income for Q2 FY 2012-13 was substantially increased from

that of FY 2011-12. Even Q1 for FY 2012-13 and 2013-14, and Q4 for FY 11-12 and FY 12-13

saw a considerable rise in the Net Income. But despite of recording considerably higher

sales (compared to Q3 FY 11-12), Q3 FY 12-13 saw a fall in the Net Income.

13-14 : 2013-2014

12-13 : 2012-2013

11-12 : 2011-2012

13-14 : 2013-2014

12-13 : 2012-2013

11-12 : 2011-2012


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COMPARING QUARTERLY PERFORMANCE

Above graphs shows companys progress in terms of Total Income and Net Income (Quarter by

Quarter). As can be seen, Companys Net Income increased consistently from Q2 of 2011-12 till Q1

of 2012-13 after which it saw a heavy decline in the Net Income for 2 following quarters (Q2 of 2012-

13 and Q3 2012-13). From Q4 2012-13 onwards, company recovered again and recorded highest Net

Income in Q1 2013-14 (compared to the previous 7 Quarters).


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GENERIC RATIO ANALYSIS

LIQUIDITY RATIOS

1. CURRENT RATIO

Current Ratio for Exide Industries is more than 1.6 between the financial year 2009-13

which is treated as very healthy for this industry (Batteries). This shows that company has

adequate current assets to cover its current abilities without having to resort for outside

financing.

The ratio between all current assets and all current liabilities, a way of expressing liquidity is

a measure of the firms short-term solvency. It indicates the availability of current assets in

rupees for every one rupee of current liability. A ratio of greater than one means that the

firm has more current assets than current claims against them.

Formula:

Interpretation

The standard norm for current ratio is 2:1. This ratio was from 1.601.75 with not much of

a variation. So the ratio is not that satisfactory but it does not even fall in any crisis state.

2. WORKING CAPITAL TURNOVER

The difference between current assets and current liabilities excluding short-term bankborrowing is called working capital. A measurement comparing the depletion of working

capital to the generation of sales over a given period provides some useful information as to

how effectively a company is using its working capital to generate sales.

Formula:

Interpretation

Working Capital Turnover has constantly decreased from 10.69 (2008-09) to 6.56 (2012-13)but still it is much better than its competitors Amtek (0.981.49) and Amara Raja Batteries

(3.564.99). So in all Working Capital Turnover looks pretty healthy for Exide Batteries.

LEVERAGE RATIOS

1. DEBT TO EQUITY RATIO

It shows the ratio between capital invested by the owners and the funds provided by the

lenders.

formula:


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Interpretation

The ratio gives results relating to the capital structure of a firm. Debt to equity ratio has

increased from 0.53 (2008-09) to 1.22 (2012-13). We can conclude that the companys

dependence on the debt fund is increasing. Now, if we look at its competitors then we can

see that only Amara Raja Batteries have reduced its dependence on debt funds as its Debt

to Equity Ratio has decreased from 0.82 (2008-09) to 0.16 (2010-11). While Amtek Indias

Debt to Equity Ratio is generally higher than Exide Batteries, we can safely say that Exide

Batterys Debt to Equity ratio is average in this industry.

EFFICIENCY RATIOS

1. INVENTORY TURNOVER RATIO:

It indicates the firm efficiency of the firm in producing and selling its product. It is calculated

by dividing sales by the average inventory.

Formula:

Interpretation

Inventory turnover ratio was 8.39 and 8.69 for financial year 2008-09 and 2009-10

respectively. After this it has decreased to 6.44 in the financial year 2012-13. While

Inventory Turnover has decreased but still it is one of the highest in the industry as

compared to its competitors. A high ratio implies either strong sales or ineffective buying

and in our case the high ratio is because of its strong sales.

2.

RECEIVABLES TURNOVER RATIO

It is found out by dividing sales by account receivables. Receivables Turnover is used to

quantify a firm's effectiveness in extending credit as well as collecting debts.

Formula:

Interpretation

Receivables turnover ratio continuously decreased from 14.33 (2008-09) to 10.75 (2012-

13) but still it is much higher from its competitors whose Receivables Turnover ranged from

4 -6. This shows that Exide Batteries is effective in using its assets.

3. PP&E TURNOVER RATIO

This ratio tells you how many dollars of sales your company gets for each dollar invested in

property, plant, and equipment (PPE). Its a measure of how efficient you are at generating

revenue from fixed assets such as buildings, vehicles, and machinery.

Formula:


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DUPONT ANALYSIS

1. Return on Assets (ROA)

This ratio shows how well a company is using its assets to make money. Basically, the

premise is that how well a company uses its assets to generate revenue goes a long waytoward telling the tale of its overall profitability.

Interpretation

ROA has decreased substantially from the high of 28.20 (2009-10) to the lows of 9.02 (2012-

13). The reason for this huge change in ROA is due to continuous decrease in Net Income

and substantial increase in Assets during 2012-13. If we compare it to its competitors then

we will see that Amtek India has a very low ROA ranging from 2.5-3.5 while ROA of Amara

Raja Batteries is quite similar to Exide Batteries.

2.

Return on Equity (ROE):

Return on equity (ROE) measures the profit earned for each dollar invested in a companys

stock. You compute it by dividing net income by average owners equity.The higher the

ratio, the more efficiently the companys management is utilizing its equity base.

Formula:

Interpretation

ROE started from a value of 20.70 (2008-09), then reached the highs of 33.92 (2009-10) andthen it reduced continuously to 19.06 in the financial year 2012-13. While if we do

competitors analysis, Exides ROE is much better than its competitors where Amtek India

ranged from the lows of 4-6 and Amara Raja Battery was just lower than Exide Batteries. So,

Exide Batteries has used its equity base quite efficiently.

3. BOOK TO MARKET RATIO

A ratio used to find the value of a company by comparing the book value of a firm to its

market value. The book-to-market ratio attempts to identify undervalued or overvalued

securities by taking the book value and dividing it by market value. In basic terms, if the

ratio is above 1 then the stock is undervalued; if it is less than 1, the stock is overvalued.

Formula:

Interpretation

Book to Value Ratio ranged from 0.18 to 0.29 with 0.27 in the financial year 2012-13. This

shows that the stock is overvalued. If we compare it with its competitors - Amara Raja went

from undervalued (2.57) to overvalued (0.80) from financial year 2008-09 to 2010-11

respectively and Amtek India is undervalued (3.206.71) between financial year 2008-09 to

2010-11.


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MAPPING THE PERFORMANCE WITH COMPETITORS

2008-09, 2009-10 and 2010-11 years are considered for comparative study of three chosen

firms due to unavailability of latest years data for Amtek India Ltd. We have compared

various ratios to gauge the relative performance of the companies Exide Industries, Amtek

India and Amara Raja Batteries Ltd.

Among the three firms chosen for study Amara Raja is found to have the largest market

share. For mapping the performance of Exide Industries with competitors on profitability vs

sales growth, net income, net sales, net growth and net profit margin is compared forfinancial years 2008-09, 2009-10, 2010-11 separately.

4766.084399.86

3798.80

1437.051036.44 831.02

7420.68

6543.076252.25

0.00

1000.00

2000.00

3000.00

4000.00

5000.00

6000.00

7000.00

8000.00

2010-11 2009-10 2008-09

Net Sales

Exide

Amtek

Amara Raja

8.32

15.82 15.25

38.65

24.72

-36.99

12.51

8.80

18.91

-50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

40.00

50.00

2010-11 2009-10 2008-09

Sales Growth

Exide

Amtek

Amara Raja


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Comparing the net profit margin we have found Exide Industries doing farer than its

competitors. Though Net Income and Net Sales are higher in case of Amara Raja but higher

net profit margin refers towards the reduced net expenditures in case of Exide Industries.

65%, 14% and 30% more value of NPM over its close competitor Amara Raja Batteries(which

is found to be its closest competitor) are found in the years 2010-11, 2009-10, 2008-09

respectively.

586.58

493.43

190.40

113.4578.73 58.22

792.86

702.92

370.40

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

900.00

2010-11 2009-10 2008-09

Net Income

Exide

Amtek

Amara Raja

13.8413.20

7.757.90 7.61 7.16

8.38

11.31

5.98

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

2010-11 2009-10 2008-09

Net Profit Margin

Exide

Amtek

Amara Raja


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For measuring the profitability of firms Return on Assets (ROA) and Return on Equity (ROE)

ratios are considered. Both Ratios are found to be highest for Exide Industries for the period

2008-2011.

25.06

28.19

14.63

3.05 2.68 2.72

21.29

23.99

12.01

0.00

5.00

10.00

15.00

20.00

25.00

30.00

2010-11 2009-10 2008-09

Return on Asset

Exide

Amtek

Amara Raja

27.26

33.91

20.69

6.425.01 4.04

24.93

28.02

20.47

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

2010-11 2009-10 2008-09

Return on Equity

Exide

Amtek

Amara Raja


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Higher Net profit Margin makes the dividend paid and dividend payout ratio(dividend

paid/net income) highest in case of Exide Industries. Cap-ex values (purchase of fixed asset

sales of fixed assetdepreciation) are also compared.

152.77

75.12 74.39

6.462.76 2.62

41.85

6.83 3.99

0

20

40

60

80

100

120

140

160

180

Exide Industries

Amtek India

Amara Raja

Dividend Paid

145.55

41.74

102.5889.38

937.95

141.42

10.11 25.47

94.48

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

900.00

1000.00

2010-11 2009-10 2008-09

Exide Industries

Amtek India

Amara Raja

Capital Expenditure


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For measuring liquidity, current ratio of firms is compared. Exide is found to have the lowest

current ratios 1.75, 1.64 and 1.65 in the financial years 2010-11, 2009-10 and 2008-09

respectively.

1.75 1.64 1.65

3.89

5.91

3.53.81 3.81

4.62

0

1

2

3

4

5

6

7

2010-11 2009-10 2008-09

Exide

Amtek

Amara Raja

Current Ratio


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MAJOR INDICATOR(S) WHICH CAPTURE THE INDUSTRY CHARACTERISTICS

In this comparison we are keeping this assumption in our mind that Amtek India has

performed poorly relative to its peers, so it is not considered much while doing industry

analysis.

1. Efficiency :

Battery industry has a very high inventory turnover ratio, ranging from 6.5 9.Inventory Turnover Ratio measures company's efficiency in turning its inventory into

sales. Its purpose is to measure the liquidity of the inventory.

So we can comfortably say that Battery Industry sells and replaces its inventory a

more number of times than other industry or we can say that it has a better

inventory control which helps in increase in sales and a lower risk of loss through un-

saleable stock.

Even the other turnover ratios like receivables turnover and payables turnover are

also very healthy.

2. Share Price:

0.2 0.18 0.29

3.2

4.03

6.71

0.8 0.76

2.57

0

1

2

3

4

5

6

7

8

2010-11 2009-10 2008-09

Exide

Amtek

Amara Raja

Book Value/ Market Value


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There has been sudden growth in share price of Battery Industry with an increase of

350% - 450% from the financial year 2008-09 across the industry which is an unusual

increase. This has helped in increase in the Price to Book ratio of the industry which

shows optimism for this industry and it is a good indication of what investors are

willing to shell out for each rupee of a company's assets

FINANCIAL HEALTH OF EXIDE INDIA LTD

Highlights of 200708

Turnover rises 51 per cent to Rs 3606 crore

Pays 40 per cent dividend and thus maintains uninterrupted dividend payment track

record for 60 years

Automotive battery production crosses 608 million plates

Industrial battery production crosses 1169 million amp Dedicated facility for export market goes on stream

Exide Industries net profit jumps 61 per cent to Rs 250 crore

Highlights of 2008-09

Turnover rises 17 per cent to Rs 4233 crore

Pays 20 per cent final dividend; full year dividend payout 60 per cent

Automotive sales cross 14 million batteries

Industrial battery sales cross 1.3 billion amp hours

The Companys reliance on bank borrowings has reduced and consequently the debt toequity Ratio of the Company at end March 09 is 0.26 : 1.


Net turnover rises 12 per cent to Rs 3,794 crore

Pays 40 per cent final dividend ; annual dividend 100 per cent

Debt-Equity Ratio at 0.04 : 1

Exide Industries Ltd, declared a 132% rise in the net profit to Rs 130 crs during the third

quarter (OctoberDecember 09) of financial year 2009-10.

During this period, the companys net turnover rose 16% to Rs 913 crs.


Exide Industries Ltd reported a 35 per cent rise in net profit and 30 per cent rise in gross

sales during the first quarter of 2010-11 compared to the corresponding period of the

previous year.

During the period under review, the companys gross sales stood at Rs 1410 crore,

compared to Rs 1084 crore during the same period of the previous year.


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Net profit stood at Rs 165 crore compared to Rs 122 crore earned during the same

period of the previous year.


Exide top line grows by 25 percent

Net turnover during the 3-month period rose 25 per cent to Rs 1551 crores

Profit from operations during the same period at Rs.205 crores rose 10 per cent

sequentially and 3 per cent as compared to the corresponding period of the previous

fiscal.

Net Profit of Rs. 152 crores even though reflects a de-growth of 7% on YOY basis is 6.6%

higher than the previous quarter.

Exide net profit rises to Rs.120 crores

Net profit for the quarter was Rs.120 crores as compared to Rs.51crores for the samequarter of the previous year representing an increase of 135%.


Exide reports 40 per cent sequential growth in net profit

Exide Industries Ltd reported higher net profit in the first quarter of the current

financial year 2013-14.

The sequential growth in Profit Before Tax of Rs 238 crores has been significantly

higher by 16% as compared to the previous quarter ended 31st March, 2013.

Exide reports Rs 104 crore net profit on Rs 1462 crore turnover

Exide Industries Ltd on Thursday reported a net profit of Rs 104 crores on a net

turnover of Rs 1462 crores for the third quarter ended December 31, 2012.

Since it has Price/Book Ratio for the last year is 3.7 ,this shows high optimism in the

investors mind. Since they are willing to shell out more money for every rupee of the

asset for the company.

REFERENCES

1)

http://capitaline.com/user/framepage.asp?id=12) http://www.exideindustries.com/eil/company/company.html

3) www.exideindustries.com/press_realease.html

4) http://www.investopedia.com

5) http://www.capitaline.com

6) http://www.wikipedia.org

7) http://www.moneycontrol.com

8) Financial Accounting by Needles and Powers
http://capitaline.com/user/framepage.asp?id=1http://capitaline.com/user/framepage.asp?id=1http://www.exideindustries.com/eil/company/company.htmlhttp://www.exideindustries.com/eil/company/company.htmlhttp://www.exideindustries.com/press_realease.htmlhttp://www.exideindustries.com/press_realease.htmlhttp://www.investopedia.com/http://www.investopedia.com/http://www.capitaline.com/http://www.capitaline.com/http://www.wikipedia.org/http://www.wikipedia.org/http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.wikipedia.org/http://www.capitaline.com/http://www.investopedia.com/http://www.exideindustries.com/press_realease.htmlhttp://www.exideindustries.com/eil/company/company.htmlhttp://capitaline.com/user/framepage.asp?id=1


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CFR PROJECT Report Final

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