Companies

Eveready Industries Q1 net profit up 21% to ₹30.13 crore

PTI New Delhi | Updated on August 10, 2021

Pent-up demand in June boosted turnover for the battery company

Battery and flashlight maker Eveready Industries India Limited on Tuesday reported a 21 per cent increase in consolidated net profit at ₹30.13 crore in the first quarter ended June 30.

The company posted a consolidated net profit of ₹24.99 crore in the same period last financial year, it said in a regulatory filing.

Consolidated total income during the period under review stood at ₹283.04 crore as against ₹275.13 crore in the year-ago quarter, the company added.

During the quarter, the turnover was higher due to "robust pent-up demand in June as the economy started to open up from lockdown-like restrictions imposed in the earlier part of the quarter to counter the second surge of the pandemic," it said.

"However, the turnaround in June could not entirely offset the lockdown related disturbances in the supply chain during the earlier months," the company added.

Battery and flashlight segment outlook

The performance of the battery and flashlight segments remained relatively unaffected despite the second surge of the pandemic, it said. The battery segment also gained demand as imports of cheap chinese batteries remained low following the implementation of quality standards issued by the Bureau of Indian Standards (BIS). However, demand in the appliance segment remained muted during the quarter as consumers continued to curb non-essential purchases in the midst of the pandemic.

Eveready Industries India said price increases taken in the battery and flashlight segments to mitigate sharp raw material cost increases and the impact of rupee depreciation aided turnover.

On the outlook, the company said," The situation in the battery segment should continue to look positive as imports continue to remain low with the BIS standards having come into force - providing a level playing field to domestic manufacturers." Moreover, the proliferation of various battery-operated medical equipment should add filip to battery demand.”

The flashlight segment is also likely to remain steady as the rural economy revives from the adverse impact of the pandemic. Increased focus on rechargeable flashlights is also likely to benefit the segment, it added.

Eveready said its lighting segment could partially recover from a weak consumption demand as the economy started to open up towards the end of the quarter from lockdown restrictions. The situation is likely to improve further in the forthcoming quarters as the economy returns to normalcy and there is a revival of demand.

However, the small home appliances category is yet to reach scale due to overall weak demand. The current Covid-19 situation is expected to impact demand for the category in the near term as consumers are likely to curb discretionary spending over essential purchases.

In the medium to long term, with growing disposable incomes and the government's initiative towards rural electrification, this category is expected to improve, the company said.

Published on August 10, 2021

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