Even as the Burmans, promoters of Dabur India, look to on-board its directors and come in as promoters of Eveready Industries , the company has outlined a strategy that includes augmenting product portfolio, enhancing reach to consumers through wider array of products at affordable price points and bringing in improvements in processes. This, as it sets out on “transformation” with a clear focus on growth across categories.

The shareholding of Burmans, promoters of Dabur India, in Eveready has gone up to 38.3 per cent as they obtained 14.3 per cent equity through the open offer. According to informed sources, the Burman family has sought three board seats and may also look to appoint a Chairman, post the open offer as per Sebi guidelines.

“Now that the open offer has closed, we will look to on-board our directors after the pay-out to investors and transfer of shares. This exercise is expected to be completed by July 5. We would automatically be classified as Promoters in the next shareholder filing, post July,” Mohit Burman, Vice-Chairman, Dabur India said in response to queries sent by BusinessLine.

The Board seats will be taken post completion of the offer and after the pay-out to investors. The names of nominee directors will be disclosed closer to the time and will be intimated to the company first, he said.

Plans for the company

It is to be noted that after announcing an open offer to acquire 26 per cent stake in Eveready early this year, the Burmans, promoters of Dabur India, had said that they plan to “professionalise” the company and consolidate its market leadership in the dry cell business.

According to Suvamoy Saha, Managing Director of Eveready, the fundamental strengths of the businesses which include solid brand, strong distribution reach and significantly high market share in the core categories of batteries and flashlights, remain intact. The management is now purely focused on harnessing these strengths for delivery of results.

“The company is now on a journey towards the higher reaches and is in the midst of a transformation that provides the road map. The company has now taken steps to address areas of weaknesses in its operations and the product portfolio. Work is afoot in improving each of these areas, such as portfolio augmentation, reaching out to consumers and process improvements,” Saha said in the latest annual report.

Slow-down in 4th quarter

Eveready witnessed nearly three per cent decline in turnover at ₹1,207 crore during the year ended March 31, 2022, as compared with ₹1,249 crore in FY21. This was primarily due to a slow-down in the fourth quarter in the core categories of batteries and flashlights, and also due to the gradual exit from the appliance business in the second half of last fiscal.

“The company’s growth in the past has been negligible. This is an identified area for improvement. Towards this, the company is working to chart out a strategy for growth and also improve existing operational areas,” he said.

Areas of growth

With about 1.3 billion batteries sold annually, Eveready holds nearly 50 per cent share in the Indian dry cell battery segment. The batteries segment saw an unprecedented cost push necessitating increase of prices, which resulted in market resistance. This coupled with slowdown of demand due to inflationary conditions led to the business being subdued in the fourth quarter. However, the company is hopeful that the battery business will return to a much higher turnover and profitability in not too distant a future.

The flashlights market was sorely affected by the dumping of cheap imports from China. The company has adjusted its product portfolio to address market requirements fueling such cheap imports and is hopeful this would help it regain lost market share.

The lighting business is an area for growth for the company. This business already comprises around 20 per cent of its turnover.

“It is reasonable to expect that the support of the brand and distribution will increase the business manifold in the near term. The business was at a near break-even level in 2021-22 and is expected to turn profitable in the immediate future,” Saha said in the report.

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