Exide Industries Limited

Exide has all probability of correcting to Rs 135-140 in next one month’s time. If one has a short horizon and wants to play on the volatility one can look to exit at Rs 150 and can re-enter at Rs 140 from one year view."  As a lot of positions were built up on expectations of good nos.

Q1 results with Q3 results of FY11, at that time the share ruled in the range of Rs180 and since then it has corrected to as low as Rs120. At that time the situation was not very conducive, it was bad for all the stocks because the market had started correcting from November and the results came in the month of January.
So, the share has all probability of correcting to Rs 135-140 in next one month’s time. But one should take this Q1 results on account of the increase in the lead prices, because 70% of the lead constitutes raw material component. These kind of companies always have a lag effect, because they are not able to pass on the cost increase to the original equipment manufacturers (OEMs).
Even in case of the replacement market there is a lag effect of about one month and OEM it is about three months. So, since the caller has a view of one year he can remain invested. There is no need to worry at all. This is a blue chip company, but if he has a short horizon and he wants to play on the volatility he can exit now at Rs 150. He can look to re-enter again at about Rs 140 and take a one year view.

The stocks that are looking attractive are Mothersum Sumi, Amar raja Batteries.