FY17 AR notes:
Market leader in the Indian dry cell battery segment, commanding over 50% market share
Commands over 75% market share in the Indian organised flashlights market
4000+ distribution network
RoNW = 32%
RoCE = 25%
D/E ratio = 0.68
We have also witnessed a demand recovery in the flashlights segment after sluggish growth for a few years.
We invested in capacity expansion as we were optimistic of our core businesses.
We started commercial production at our new plant in Goalpara, Assam, that has a capacity of 500 million pieces of batteries and 9 million LED flashlights. This project is eligible for tax reliefs applicable to the north-east region.
Flashlight capacity = 12.5m
Battery capacity = 2.3b
Aiming to aggressively pursue government business.
Eveready appliances are available in general trade, modern trade as well as e-commerce platforms across India. We are present in almost all large format stores (LFR) like HyperCity, D-Mart, Spencer, among others. We also sell through Cash & Carry operators (Metro Cash & Carry and
Walmart).
21 Appliance product categories offered.
The battery category was adversely impacted due to lower consumer off-take and de-stocking in trade channels post demonetization. The market also continued to be disturbed by poor quality products imported from China at dumped prices. As a result, the category volume and value both
remained flat during the year. The market share position of the major players remained unaltered during the year under review, with your Company’s share being estimated at 50%.
The flashlights market remained disturbed by proliferation of cheap flashlights of poor quality by the unorganized and gray market players. However, in a heartening turnaround, the category could overcome the adverse impact of demonetization and registered a robust volume growth
during the last quarter of the year, resulting in an overall growth of 4% for the year. Turnover however de-grew by 4.8% due to rationalization of MRPs, necessitated to overcome the adverse impacts mentioned above.
Your Company’s share of the organized flashlight market was maintained at 70%. However,
** this has to be seen in the perspective of a large unorganized market, **
which is estimated at the same size as the organized market.
Lighting: Net sales from this category for the current year stood at 299.17 Crores – and it is expected that this category will provide significant turnover growth in the years to come. Appliances: Net sales from this category for the current year stood at 39.91
Crores and is expected to provide significant turnover growth in the years to come.
It is anticipated that the GST regime will bring in higher degree of tax compliance in the country.
The battery and flashlight categories, bear the impact of non-compliance with tax laws by unorganized part of the market – either through undervalued dumped imports from China for batteries or gray market local operators in the flashlights market. It is expected that
the GST regime will bring such elements into its net thereby eliminating the unfair gap in the pricing structure with tax compliant
organizations. As a consequence, both batteries and flashlights should show reasonable growth in 2017-18.
The Indian market for dry cell batteries is now estimated to be worth over ` 1,600 crores by value and 2.7 billion pieces by volume.The consumption of batteries is driven by growth in the off-take of its applications. A growing need for portable power and the advent of a number of battery-operated gadgets like remotes, toys, clocks and torches have catalyzed consumption. Since these gadgets are used on an everyday basis, batteries have enjoyed a non-cyclical demand.
