Companies

Eveready Industries Q2 profit jumps 222% to ₹58 crore

Our Bureau Kolkata | Updated on November 13, 2020

Battery and flashlights maker Eveready Industries India Ltd posted nearly 222 per cent rise in standalone net profit at ₹58 crore for the second quarter ended September 30, 2020, as compared with ₹18 crore same period last year.

The growth in profits was primarily on the back of better turnover mix towards the more profitable segments of batteries and flashlights and lower cost of operations, the company said in a press statement.

Revenue from operations increased by seven per cent to ₹373 crore during the quarter under review as against ₹348 crore same period last year.

“Gross margin was significantly higher by 26 per cent in comparison to the previous year due to a better turnover mix towards the more profitable segments of batteries and flashlights. This coupled with lower employee cost, lower distribution cost, lower promotional spends and lower overheads as the various establishments of the company continued to be run in a restricted manner in the Covid environment enhanced profitability,” the release said.The gross margin percentage was 46.5 per cent as against 39.4 per cent same period last year. The discontinuance of the packet tea business further helped the company in improving margin and releasing working capital.

“The company’s core categories of batteries and flashlights continue to witness a healthy demand, given the sharp decrease in dumped imports from China and the disruptions caused to the unorganised market in the midst of the pandemic. 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. The flashlight segment is also likely to benefit as many of the unorganised gray market players may have been adversely impacted by cash flow constraints arising out of economic disruption,” the release said.

The lighting segment could partially recover from a weak consumption demand and supply constraints arising out of the pandemic and the situation is likely to improve in the forthcoming quarters as normalcy is restored in demand and as supply sources are stabilised. The turnover in the small home appliances category is yet to reach scale due to an overall weak demand. However, in the medium to long term, with growing disposable incomes and government’s initiative towards rural electrification, this category is expected to improve.

The company’s scrip closed at ₹154.65, up by 1.71 per cent on the BSE on Friday.

Published on November 13, 2020

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