Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Eveready Industries India Ltd (BOM:531508, Financial) retained a robust 53% market share in the battery segment, demonstrating ongoing leadership.
- The alkaline battery segment saw an impressive 62% growth in value, indicating a promising trend as consumer preferences shift.
- The company is building a manufacturing facility for alkaline batteries, which will be the only one in the country, aiming to drive gains in quality and cost efficiency.
- Flashlights segment reported a 16% revenue growth during the quarter, driven by innovative product launches.
- The company is focusing on expanding its product lineup and distribution reach, which is expected to spur growth in the lighting business.
Negative Points
- Overall revenue for the quarter was muted at 362.4 Crore compared to 364.9 Crore previously, indicating stagnant growth.
- The rural segment showed weak demand, leading to a modest contraction in the overall battery segment.
- Price erosion in the lighting industry continues to impact the consumer segment, affecting overall top-line growth.
- Manpower costs increased by 12% due to investments in the lighting segment, impacting profitability.
- The company faces challenges in the carbon zinc battery market, which still constitutes a significant portion of domestic demand.
Q & A Highlights
Q: Given the price erosion from Q3 of last year, do you expect revenue to maintain at the 350 crore level for Q3 and Q4?
A: Generally, Q1 and Q2 are stronger quarters for us, while Q3 and Q4 are typically below 350 crore. We aim to be closer to that level, but it may not match Q1 and Q2 numbers. However, it will definitely be better than Q3 FY24 due to our growth momentum and strategic initiatives like RTM. - Suvamoy Saha, Managing Director, Executive Director
Q: Can you provide an update on the alkaline battery manufacturing facility and its expected impact?
A: We are in the process of finalizing the location, with a decision expected by mid-December. The facility is expected to be operational by H2 FY26, which will help us achieve cost savings and improve margins. We are also considering adding other product lines to enhance economic viability. - Suvamoy Saha, Managing Director, Executive Director
Q: How is Eveready addressing the competitive landscape in the alkaline battery market?
A: We are leveraging our extensive distribution network, reaching 5 million outlets, compared to competitors' 500,000. We are also investing in a new manufacturing facility to improve margins and distribution efficiency. Our focus is on expanding our market share in the growing alkaline segment. - Suvamoy Saha, Managing Director, Executive Director
Q: What are the expected debt levels after the planned capital expenditure for the new facility?
A: Currently, our debt stands at 256 crore. We plan to add approximately 150 crore for the new project, which will bring the total to around 400 crore. However, we are continuously reducing existing debt as per the normal repayment schedule. - Suvamoy Saha, Managing Director, Executive Director
Q: Can you provide a breakdown of segment-wise revenue and EBITDA for H1?
A: For H1, the revenue was 456 crore for batteries, 108 crore for flashlights, and 166 crore for lighting. The EBITDA percentages were 17.5% for batteries, 11.5% for flashlights, and 2.5% for lighting. - Suvamoy Saha, Managing Director, Executive Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
