Eveready Industries expects lighting business to break even in FY24

Eveready Industries India is expecting that the consumer lighting business would achieve break-even during the current fiscal and start generating profits from FY25.

The company is planning to premiumise its offerings under the batteries business and grow its market share in the flashlights segment to achieve “a higher growth” in topline during the current fiscal.

Plans are afoot to explore new avenues for diversification into “immediately associated categories” such as mobile chargers in the next 12-18 months.

The company’s turnover grew around 14 per cent to ₹1,328 crore in FY23.

Battery segment accounts for nearly 65 per cent of the total turnover, while flashlight business contributes 12 per cent and lighting business provides 22 per cent of the turnover.

According to Suvamoy Saha, Managing Director, Eveready, the B2C market for lighting is estimated to be close to ₹10,000 crore and the top two players together hold around 30 per cent share in the category. So there is a huge scope for growth, Saha added.

“We are a small player in this segment as we entered recently, but we have the scope to grow given our brand strength. The lighting business is expected to break even during the current fiscal and we expect it to start generating profits from next financial year,” Saha told businessline.

The company, which had an EBITDA margin of around 8.6 per cent in FY23, is expecting to grow it to close to 10 per cent in FY24, backed by a growth across businesses and premiumisation trend.

“We entered categories like mobile chargers earlier but we had come out of it. The company could take a relook at those categories and that will keep our hands full for the next 12-18 months,” he said.

Eveready, which has a net debt of around ₹350 crore at present, expects to bring it down to below ₹100 crore in the next three years with the help of operating cash flows.

The company, which holds close to 54 per cent share in India’s battery market, is currently “under indexed” in the premium segment, which is primarily the alkaline batteries.

“Though we are at a high level of market share, we still have scope to grow. We have been largely focusing on the middle segment so far and we now want to explore the premium side, which is about 10 per cent of the total market. Our share in that segment is relatively low and we would like to grow it with our range of products,” he said.

‘Threat from unorganised players’

The ₹1,500 crore flashlights market in India has seen a huge influx from unorganised players, primarily Chinese manufacturers, who have disrupted the industry. Eveready, which was the single largest brand in the segment with close to 50 per cent share of the market, has seen its market share shrink in recent years.

“Most of these players do not comply with the metrology rules; they make improbable claims and offer their products at huge discounts. In majority of the cases, there is under invoicing and they do not take responsibility of recycling while branded players like us are expected to recycle 60 per cent of batteries..so there is a cost of compliance,” he said.

The company is pitching for bringing in anti-dumping duty to create a level playing field.

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