The Hindu Business Line : Eveready posts net loss on higher turnover last fiscal

Looking ahead
Expects turnover to double to Rs 1,500 cr in 4 years
Emphasis being laid on the packet tea business.
Plans to increase mosquito coils biz.
Also looking at opportunities in rural education sector.

Kolkata May 11 For the first time, Eveready Industries Ltd has posted a net loss on a higher turnover. In 2006-07, the turnover (net sales) was Rs 772.52 (Rs 732.81 crore) thus registering a growth of 5.4 per cent.

During the same period, the company suffered a net loss of Rs 13.42 crore as against the net profit of Rs 79.65 crore in 2005-06, when the company earned Rs 76 crore from the sale of property in Chennai.

Mr Deepak Khaitan, Vice-Chairman and Managing Director of the company, while talking to newspersons here on Friday, attributed the drop in profit to drop in sales of batteries and flashlights by about 20 per cent, caused by a rise in product prices as a sequel to jump in input costs, more than 50 per cent, including 150 per cent rise in zinc price, and stiff competition from cheap LED torches from China.

The sale of flashlight batteries accounting for 55 per cent of the company's battery business suffered. Also, last year's monsoon failure impacted the sale of batteries and flashlights. "The battery business is somehow linked to the monsoon," he said.

Non-battery biz

Mr Khaitan indicated that in four years from now, the company's turnover would more than double to Rs 1,500 crore and 50 per cent of it would be generated from non-battery related businesses. A good deal of emphasis was being laid on the packet tea business. "While there is no immediate plan to launch new brands in addition to the four brands we already have, we intend to move up the value chain," he said.

The business of mosquito coils would be increased and new products would be launched. For example, as he pointed out, exclusive marketing arrangement had been entered into with Phoenix Lamps Ltd for compact fluorescent lamps for distribution through the company's network.

"We're also looking into opportunities in the education sector, keeping in view the rural areas as market," he said. "There are various other things we have in mind and the plans will concretise in course of the year."

However, as he made it clear, there would be no let-up in the battery business. The battery unit in Uttaranchal started production in April, thus boosting the capacity to two billion batteries from the earlier 1.6 billion.