Exide Industries made sharp gains early on Friday as the market expects the company to declare a bonus in the ratio of 1:2 or 2:5.

The scrip of the Calcutta-based batteries major leaped up 5.5% to Rs 89.65 on BSE, as a consequence. A total of 6,248 Exide Industries shares were traded on BSE in an hour of trading.

Anticipation over the bonus issue has spurred the stock on over the last few trading sessions. From Rs 75.10 on 17 April 2004, the scrip rallied 13% in four trading sessions to Rs 84.95 on 24 April 2003. The board meeting to decide on the bonus issue is slated for today.

Marketmen are expecting a bonus in the ratio of 1:2 or 2:5. The company already has a high equity base of Rs 35.64 crore.

Exide Industries is a major player in the original equipment market, and enjoys close to 50% market share in the Rs 2,000-crore (Rs 20 billion) Indian lead-acid battery market. The automotive segment plays a crucial part in EIL's fortunes, since nearly 60% of the company's revenues come from this segment alone.

The company's performance has improved over the last few months on the back of a recovery in various segments of the automobile sector, including commercial vehicles. For the quarter ended 31 December 2002, net sales increased 11% to Rs 214.52 crore. Net profit jumped 64% to Rs 12.72 crore.

Anticipating a spurt in business due to the Golden Quadrilateral project, Exide has undertaken a new project called Project Highway. As per the project, the company has started actually fitting a battery on vehicles as against the usual practice of putting the battery in the hands of the dealer, who then enjoys the liberty of selling the battery wherever he deems fit.

The company is also, of late, undertaking a shift from purely the industrial sector to households and the FMCG sector.

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