Exide Industries Q2 Shock: Profits Plummet 25%! Is a GST-Fueled Comeback Brewing?

Author

Akshat Lakshkar | Whalesbook News Team

Detailed Coverage:

Exide Industries announced its financial results for the September quarter, reporting a net profit of ₹221 crore. This figure significantly missed the CNBC-TV18 poll estimate of ₹319 crore and represented a 25.8% decrease from ₹298 crore in the same period last year. Revenue stood at ₹4,178 crore, also below the poll expectation of ₹4,459 crore and down 2.1% year-on-year. EBITDA dropped 18.5% to ₹394.5 crore, with EBITDA margins contracting to 9.4% from 11.3% a year ago.

The company explained that the quarter started well but momentum slowed after August 15 due to GST rate cuts, which prompted distributors to hold back purchases, awaiting new, lower-priced inventory. To manage this, Exide reduced production in August and September, leading to under-recovery of fixed costs and impacting profitability.

Despite these Q2 headwinds, Exide Industries' standalone revenue for the first half of FY26 grew 1.3% year-on-year to ₹8,688 crore. The company is investing in its lithium-ion cell plant through Exide Energy Solutions Ltd, with production expected by the end of FY26.

Impact: The results indicate short-term profitability pressures due to inventory adjustments and macroeconomic factors like GST implementation. However, the company's positive outlook for Q3, driven by expected recovery in trade and auto OEM segments, along with robust cash generation and zero debt, suggests resilience. The progress on the lithium-ion plant is a key long-term growth driver. Rating: 6/10

Difficult Terms Explained: EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a measure of a company's operating performance. GST: Goods and Services Tax. A consumption tax imposed on the sale of most goods and services. OEM: Original Equipment Manufacturer. A company that manufactures parts or components that are used in another company's final product.