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Dry cell battery maker Eveready Industries India Ltd (EIIL) is betting big on the LED lighting business, which it expects to account for at least 30 per cent of its turnover, or around ₹700 crore, in three years.
“LED will be big in the coming days,” Amritanshu Khaitan, Managing Director, told reporters here.
The company entered the LED business late last fiscal.
Over the next one year, EIIL will look to spend substantially on advertising and branding, with the prime focus being on the LED vertical. The company is likely to raise its ad spend from 3 per cent of turnover in FY-15 to around 5 per cent, or ₹75 crore this year.
Asked if the Kolkata-based company would manufacture its own LED bulbs, Khaitan said: “By the end of this fiscal (FY-16), we will take a call on whether to go in for own manufacturing or look at outsourcing.”
Banking on its improved financials, the company is hoping to be debt-free over the next two years (FY-17). It has term loans worth around ₹80-crore. The company had repaid around ₹25-crore long and short-term debt last fiscal.
Meanwhile, backed by an increase in battery prices, the company reported a 4.36 times rise in net profit to ₹5.45 crore for the quarter ending March 31. It reported a net profit of ₹1.25 crore for the corresponding quarter last fiscal.
Net sales increased to around ₹275 crore, or a 7 per cent increase over the ₹257 crore it reported in the year-ago period.
For the full year (FY-15), it reported a 250 per cent increase in net profit to ₹49 crore. In FY-14, it had reported a net profit of ₹14 crore. Net sales for the full year increased by 11 per cent to ₹1,278 crore (₹1,153 crore).
“A price increase of around 20 per cent in FY-15 (in two tranches), along with reduction in interest costs, has contributed towards the bottom-line improving,” Khaitan added.
The board has declared a dividend of 40 per cent or ₹2 on each equity share having a face value of ₹5 each for the full year.
The Eveready stock closed at ₹270.80, up by 2.93 per cent on BSE on Monday.
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