Originally posted by subu76    Personally, i have some sort of bias against car companies. I bought a car about 6-7 years back for about 6-7 odd lakhs and i find a more improved version of the car still sells at the same price.....

Come on Subu! You are asking obvious things.

Working capital is typically made up of inventory, sundry debtors and less current liabilities. Following is the reasons for high values:

1) EXIDE should be getting cash upfront hence they don't need to struggle for money. Mostly manufactures dump the product to the dealers/end customers on credit but that does not seem to be the case with EXIDE.

2) EXIDE is definitely having pricing power. If you look at the growth rate theey i got shocked and still wondering why EXIDE is quoting so cheap?

Net Profit     155.21     250.33     284.39     537.09     666.36
                          61.28%     13.61%     88.86%     24.07%
   

Edited by manish_okhade - 11/Jun/2011 at 9:38am

No yaar.....revenues/total number of units produced is almost same over the years 

Edited by subu76 - 11/Jun/2011 at 10:28am

So what is the verdict ? Without any bias towards Page (which is a great stock and I own it), I feel Batteries is a very interesting play and consumption per capita is minuscule in India.

Moreover I think there is some moat around the business as Manish Ji mentioned:
1. It is not just product quality - Distribution network, Technology, guarantee - These take time to build.
2. Consumers are becoming more brand conscious - How many of us will use a local battery in an inverter or car ?
3. Exide (and Amara raja) are cash rich, great financial efficiencies, decent growth but geting clubbed with rest of "auto basket".