Are Exide Industries Ltd latest results good or bad?

Exide Industries Ltd's latest financial results for Q3 FY26 reveal a challenging operational landscape. The company reported net sales of ₹4,364.51 crores, reflecting a sequential decline of 7.04% and a year-on-year contraction of 1.92%. This decline in revenue indicates ongoing difficulties in demand, particularly in the automotive battery segment. Net profit for the quarter amounted to ₹171.94 crores, which represents a significant drop of 37.02% compared to the previous quarter and a decrease of 25.66% year-on-year. The operating margin, excluding other income, contracted sharply to 8.97%, down from 11.47% in the previous quarter, highlighting severe margin compression. The financial performance also shows a deterioration in capital efficiency, with return on capital employed (ROCE) falling to 7.64% and return on equity (ROE) at 5.36%, both significantly below historical averages. This suggests that the company is struggling to generate adequate returns on its capital. Additionally, the balance sheet reflects increased leverage, with long-term debt rising to ₹943.07 crores. The company's interest coverage ratio remains healthy, but the combination of rising debt and declining profitability raises concerns about its financial trajectory. In light of these results, Exide Industries has experienced an adjustment in its evaluation, reflecting the operational challenges and deteriorating financial metrics. The outlook remains cautious as the company navigates a competitive environment marked by structural changes in the automotive industry, particularly with the shift towards electric vehicles.