Eveready Industries India Ltd is expecting an expansion in gross margin and is hopeful of touching an EBITDA margin of close to 10 per cent in FY24, up from around 8.6 per cent in 2022-23, backed by a growth across businesses and riding on the premiumisation trend.

According to Suvamoy Saha, Managing Director, Eveready, the objective for the current financial year would be to surpass the growth percentage achieved in FY23, close to 14 per cent on a year-on-year basis. The company which saw its gross margin expand by close to 150 basis points in the fourth quarter of FY23, is confident of achieving a double digit EBITDA during the current fiscal.

“Eveready is focused on driving growth across business segments with clear emphasis on riding the premiumization trend, we have the right products, and we are supplementing that with an efficient distribution and impactful ATL and BTL activities, which we wish to sustain at 10 per cent. With our route to market having settled down to our new design, the management team is focusing on growth, aided by new efficiencies. The objective for the coming financial year is to surpass the growth percentage achieved in FY23. As indicated before, relief from materials inflation and premiumization incentive initiatives have already started bearing results. As we go forward, I see a distinct possibility of further gross margin expansion and certainly a more robust margin at the EBITDA level,” Saha said in the latest earnings call transcript on the BSE.

The company, which operates across three segments, including battery, flashlight and lighting, had clocked a turnover of ₹1,328 crore in FY23. Battery accounts for nearly 65 per cent of the total turnover, flashlight close to 12 per cent and lighting accounts for 22 per cent. On EBITDA margins, batteries play around 12 per cent, flashlight 13 per cent, and lighting is breakeven at this point of time, and the trend is likely to go positive in the forthcoming year, he said.

Growing market share

Eveready saw a 50 basis point increase in market share in batteries segment in FY23 at 53.4 per cent, at a time when the broader battery market has remained flat to lower during last year. The company is looking to increase its market share by tapping into “under-indexed segments”.

For instance, carbon zinc currently accounts for around 96 per cent and the company is under-indexed in alkaline. Alkaline, which represents the premium end of the market, is about 10 per cent of the total market and it accounts for around four-to-five per cent of the company’s total portfolio. This apart, the company is also under-indexed in certain states and it would look to ramp up in those states.