Case Study: Exide Pakistan Limited EXIDE Pakistan Limited was incorporated in Pakistan in year 1953 as a private limited company in association with Chloride Group PLC of United Kingdom. Chloride Group PLC at that time had its associates in 35 countries of the world and was supported by Chloride Technical for establishing its operations. The company was listed on Pakistan Stock Exchange. It has the privilege of receiving the top 25 Companies Award 8 times. The principal business operation of the company is manufacturing batteries, chemicals and acid. The manufacturing facilities of the company are located at SITE and Hub Baluchistan while the facilities for chemical and acid are located at SITE and Bin Qasim Karachi. Exide has been trusted by country's largest state run corporations for providing solutions in the field of transportation, inverter solutions, network power and industrial solutions. Exide is privileged to have PTCL, Pakistan Railways and WAPDA as its exclusive clients. The acquisition of Automotive Battery Company Limited, Furukawa Battery in 1991 further strengthen Exide as the leading battery manufacturer in Pakistan. EXIDE Pakistan Limited has setup a Sulphuric Acid manufacturing plant at Port Qasim Industrial Area. The plant has an installed capacity of 50 metric tons of Sulphuric Acid per day. The major production of the plant is supplied to Fauji Jordan Fertilizer Company Limited The company is being managed by sons of Saddaruddin Hashwani, Altaf and Arif Hashwani. Saddaruddin Hashwani is the owner of Hashoo group and manages the largest hotel business in Pakistan. Presently the stock price of Exide Pakistan in Karachi stock market is around Rs. 140 per share. Economy of Pakistan Country's GDP (gross domestic product) growth rate for the FY ending June' 19 was estimated at 3.9 percent down from 5.2 percent last year (Source: Asian Development Bank. Asian Development Outlook 2019) the growth momentum of the Pakistani economy became unsustainable due to rising macroeconomic imbalances i.e. high and increasing fiscal and current account deficits. Pakistani currency faced major crises and declined against dollar from Rs. 100 to Rs. 156 in one years' time increasing the price of imported products. Car industry which was importing majority of the their components from abroad faced major reduction in sales because of increased prices and even their plants faced temporary closure because of reduced demand of new cars. The Industry Growth of automotive sector in the previous years was instrumental in better capacity utilization for the battery industry. Sales of locally produced cars, LTV and Jeeps declined by 7% to 223,085 units in July - May-19 as compared to 240,227 sold during corresponding period of last year. Trucks and Buses sales declined by 31% from 9194 to 6351 units. Farm tractors sale declined by 30% to 46,771 from 66,992 units. Sale of motorcycles and three wheelers declined by 7% from 1,771,629 to 1,642,482 units. Local car industry sale declined from July-2018 onward due to restrictions on non-tax filer to buy new cars and frequent increase in prices. Also, the prices of refined and recycled lead which is the main raw material for battery manufacturing increased considerably during the current year 2019. 10 million batteries were sold in year2018 in Pakistan, major players in the market are Exide, AGS, Atlus, Osaka. Millat, Phoenix, Daewoo and several imported brands are part of competitive landscape. Current Situation of the Exide Pakistan Net sales revenue of the Company for the year 2019 decreased to Rs.9.507 billion down by 22.7 percent as compared to Rs.12.301 billion during the last year due to decrease in sales volume of Battery Division. Gross profit for the current year also decreased from Rs.1,356.6 million to Rs.972.2 million, down by 28.3 percent, mainly due to increase in cost of raw materials and lower sales revenues. Selling and distribution expenses increased by 8.1 percent and administration & general expenses increased by 11.5 per cent from 109.3 million to 121.9 million due to inflation. Operating loss Rs.151.7 million recorded as against last year profit achieved Rs.336.2 million. Financial charges increased to Rs.259.1 million from Rs.141.3 million on account of higher borrowings and increased markup rates. Loss before tax for the year 2019 was Rs.410.8 million compared to last year profit of Rs.194.0 million. Loss after tax for the current period was Rs.504.5 million as against profit of Rs.21.6 million recorded last year. Loss per share is recorded at Rs.64.94 compared to earnings of Rs.2.78 per share of last year. Despite high brand equity and leading market share in the battery market segment, company is facing major challenge of declining sales and increasing competition. Exide Pakistan has developed deep cycle batteries for UPS and solar systems but the market has become tough because of new Chinese players and entry of Daewoo a Korean company as battery manufacturer in Pakistan. Future prospects