Eveready Industries’ Q1 net jumps to ₹24 crore

Our Bureau September 9 | Updated on September 09, 2020

Eveready Industries India Ltd, the country’s largest dry-cell battery-maker, has reported a 245 per cent rise in net profit to ₹24 crore for the quarter ending June 30, 2021. Net profit in the year-ago-period stood at ₹7 crore.

The increase in profit came despite the company reporting an 18 per cent decline in operating income to ₹263 crore (₹321 crore).

According to a company statement, the turnover fell sharply because of the lockdown. With the economy unlocking again, a healthy demand for batteries and flashlights was seen. In May and June, battery volumes rose by over 12 per cent year-on-year, while flashlight volume was higher by around 6 per cent.

The lighting and small appliance segments saw weak demand and supply disruptions, leading to lower turnovers for the period under review.

Gross margins remained at par (around ₹123 crore) y-o-y, due to a better turnover mix towards the more profitable segments of batteries and flashlights. This along with reduced costs saw operating EBIDTA increase by 60 per cent over the previous year. “The discontinuance of the packet tea business further helped the company in improving margin and releasing working capital,” it said in the statement.

Operating margins are expected to improve in the forthcoming quarters.

Although supply chains are yet to normalise, core categories — batteries and flashlights — are witnessing healthy demand due to a “sharp decrease in dumped imports from China” and disruptions caused to the unorganised market, its statement said.

The lighting segment is expected to improve in the forthcoming quarters.

According to the company’s statement, the Covid outbreak is expected to “impact demand” in the small appliance segment with consumers curbing discretionary spends. Recoveries are expected in medium to long term.

Published on September 09, 2020

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