Eveready eyes joint ventures in personal-care, food space with South-East Asian companies

Eveready Industries is eyeing joint ventures (JVs) with South-East Asian FMCG majors in the food and personal care space. While lighting and small appliances are seen as future growth drivers, the company aims to be debt-free in another two years.

According to Amritanshu Khaitan, Managing Director, Eveready, through these JVs, will allow FMCG majors to leverage its deep distribution network that has been built through the company’s core business verticals — battery and flashlight.

Eveready reaches out to one million outlets directly, its products are available across four million outlets and has a distributor network of 4,000. This includes a strong presence in rural India.

“For this company to go to the next level, in the next few years, we need to leverage the brand and the distribution. Till now we have focussed on leveraging the brand and extending it to categories which fit well. On the distribution front, we are on the lookout. There are people who have approached us with products that will compete with existing large FMCG companies,” Khaitan told

He, however, did not mention a time-line within which these discussions could materialise.

“When it comes to acquisitions or joint ventures, we are open to products which can be leveraged on an FMCG network. Our distribution network can sell any FMCG product,” he added. While 55 per cent of the company’s turnover is from batteries, and 14 per cent is from flashlights, lighting contributes 22 per cent and small appliances another 3 per cent. Packet tea forms the remainder.

For the first nine months of this fiscal, Eveready’s total income from operations stood at ₹1,101 crore.

The now profitable lighting vertical, focusing on LEDs, and the newly created small appliances segment are the two big bets. The company will remain asset-light in these segments.

According to Khaitan, lighting and appliances together are expected to contribute almost 40 per cent of company’s turnover in two years. (Currently, it is 25 per cent.)

With lighting expected to be a ₹500-crore vertical in two years (up from an anticipated ₹300 crore), Eveready wants to emerge as a “complete lighting solutions provider”, competing with the likes of Phillips and Havells.

New products like luminaries and baton (or tube) lights will be introduced in the B2C segment. The company will also enter the B2B category with a focus on professional lighting, outdoor contracts, real estate players’ larger projects and so on. A new team is being recruited to look into the segment.

The small appliance portfolio currently includes fans, irons, mixer grinders and air-purifiers.

The company is in the process of setting up a new distribution channel, which should be ready by the end of this fiscal.

“We will wait for this year’s festival season sales to see the traction of different offerings. Then, we’ll take a call on firming up the portfolio,” Khaitan said, adding that the vertical should break even “by this fiscal or in the next (FY19)”.

By this time, Eveready is also planning to be debt free. In FY16, debt was around ₹188 crore and the debt-equity ratio stood at 0.95.

“This year we had a capex of ₹100 crore (to bring on stream the Assam unit). Post that capex the debt is below ₹200 crore,” Khaitan pointed out.

According to him, the company is planning to make repayments to the tune of ₹100 crore this year.

“That should leave us with around ₹100 crore (of debt) and working capital requirements in FY-19,” he added.