TV Ramanathan, MD & CEO, Exide Industries said on net sales, the sales growth is 52%, on a year-on-year basis, and after tax profit, the PAT, shows a growth of 84% and for the quarter ended 30th June, the after tax profit is Rs 70 crore as against Rs 38 crore for the same period last year.

Lead constitutes about 70% of your overall raw material costs. Even in the current quarter, definitely the high lead prices are an area of concern. But we also have got the benefit of most of our OEM sale or the contract is linked through the LME prices. So, when the price goes up, automatically the selling price is also getting adjusted in line with LME price, and this year we are fortunate for the industrial sector, because as against last year, only 15% of the industrial sales, where the price variation was there. Now this year, 85% of the sales of industrial institutional customers are also linked to LME prices. So we are able to adjust the price change in line with the LME prices, Ramanathan added.

And as for the replacement rate, we had made two price increases in the last quarter and if the price continues like this, we will be making at least one more price increase this quarter. We had about Rs 8-9 crore benefit from exchange gain because of the Rupee appreciation. On 31st March 2007, we had valued all foreign currency liabilities, including the liability for lead suppliers at the March ’07 rate. And you know that the rate of March ’07 was much higher than what was at 30th June. So we got the benefit of the exchange rate, he said.

Ramanathan further said luckily for us we are catering to various sectors of the economy. We are no longer an auto component company and we expect significant growth from telecom, power sector and UPS for industrial and as far as auto is concerned the replacement market is very buoyant, even though there is slight, I will not say de-growth, buoyant growth in the auto sector for the OEM suppliers.

As against 80.4% for same period last year, despite the high lead prices, we were able to improve the operating margin by 140 basis points. We will achieve our budgeted growth even for the remaining three quarters. I can make that much commitment, Ramanathan concluded.