Eveready Industries -
Q1 FY 27 results and concall highlights -
Revenues - 407 vs 374 cr, up 9 pc
EBITDA - 61 vs 56 cr, up 10 pc ( margins flat YoY @ 15 pc )
PAT - 37 vs 30 cr, up 22 pc ( due fall in interest costs + absence of exceptional charges that were present in base Qtr )
Segmental revenues -
Batteries - 267 cr, up 12 pc
New Alkaline battery plant went live wef end of May 26. Alkaline batteries grew by 56 pc, C-Zn grew by 8 pc. Alkaline battery mkt share now @ 18 pc. Alkaline batteries contributed to 30 cr in revenues in Q1
C-Zn mkt share steady @ 58 pc
Flashlights - 63 cr, down 7 pc. Rechargeable flashlight revenues grew strongly by 22 pc @ 31 cr
Lighting and Electrical products - 87 cr, up 14 pc. The sale of accessories launched by the company are captured under this segment
Notes from previous concalls -
New products launched in last 12 months include - Irons, room heaters, immersion rods, mosquito racquets, charging devices, extension boards, bells, multi plugs, power banks
Their Mkt share in Alkaline battery segment at the end of FY 23 and FY 24 was 4 pc and 9 pc respectively
Jammu plant will have capacities so that the company can supply Alkaline batteries to other branded players in India + for exports to ME, African, other Asian mkts
Jammu plant has the capacity to make 35 cr batteries / yr at peak capacity utilisation. Should be able to produce and sell 10 cr batteries from this plant in FY 27 ( assuming 30-40 pc growth in alkaline batteries in next FY )
Company’s current mkt share in Alkaline batteries is 18 pc. Should exit FY 27 with > 20 pc mkt share
The new Jammu facility also has the capacity to make C-Zn batteries, lighting and flashlights
Awaiting for Govt clarity on GST benefits wrt production out of Jammu facility
Have also launched LiIon AA and AAA batteries ( last yr ). These batteries last far longer than even the premium Alkaline batteries. Aprox cost of these batteries is around 250 / battery
Jammu plant should help company expand GMs of Alkaline segment by 10 pc
Current EBITDA margins of value alkaline ( Ultima ) are similar to Caron Zinc batteries. Premium alkaline ( Ultima Pro ) batteries have higher margins. Anyways - as Jammu plant ramps up, margins of both types of Alkaline batteries should inch higher
Have another Plot in Noida - to be sold. Should fetch another 135 cr or so for the company. Have already recieved aprox 45 cr against the sale of the same. Should receive the remaining amount in FY 27
Last reported segmental EBITDA margins ( as reported in Q1 FY 26 ) stood @ -
Batteries - 19 pc
Flashlights - 13 pc
Lighting - breakeven
Notes from Q1 concall -
Debt on books as on 30 Jun @ 165. Yet to receive sale proceeds from the sale of second land parcel @ Noida. Company aims to be debt free in next 4-5 Qtrs
Debt on books on 31 Mar 25 and 31 Mar 26 was @ 312 cr and 201 cr respectively
Q1 was characterised by severe commodity and currency swings. Zinc prices continue to hover @ elevated levels of > $ 3500 / ton ( vs < $ 3000 / ton in FY 26 ). Also saw price hikes across their other key inputs. Took calibrated pricing actions in Q1 to protect their margins
Alkaline battery volume growth in Q1 stood @ 48 pc
Seeing some stabilisation in the LED prices ( a key positive for the Industry )
Have also launched Insulation tapes, Wires under their electrical products business
Launched India’s first portable liquid mosquito repellant in Q1 ( powered by Eveready batteries )
Launched animal alarm ( high decibel ) + Flashlight - to scare away animals to protect crops against animal intrusion @ night
Continue to strengthen their leadership in the organised mosquito racket category
They intend to maintain 15 pc EBITDA margin throughout the FY ( it’s a tall aspiration - IMHO, given H2 is generally weaker and leads to weaker cost absorption ). Even if they r able to clock 13 odd pc for full FY, I ll be more than happy
Wires and cables + Electrical Ancillaries / Accessories - aim to double their annual sales in FY 27 vs what they clocked in FY 26
Looking to garner 25 pc kind of mkt share in Alkaline battery segment in next 24 months or so
Total small battery mkt size in India is aprox 4200 cr / yr - out of which 600 cr / yr is alkaline battery. The Alkaline battery segment is growing @ > 20 pc CAGR
If the Zinc prices remain high ( as they r now ), they ll have to pass on another round of price hikes to the market
No 2 and 3 players in C-Zn battery segment are Nippo and Panasonic. No 1 player in Alkaline battery segment is Duracel
Looking to garner 25 pc kind of mkt share in Alkaline battery segment in next 24 months or so
Total small battery mkt size in India is aprox 4200 cr / yr - out of which 600 cr / yr is alkaline battery. The Alkaline battery segment is growing @ > 20 pc CAGR
If the Zinc prices remain high ( as they r now ), they ll have to pass on another round of price hikes to the market
No 2 and 3 players in C-Zn battery segment are Nippo and Panasonic. No 1 player in Alkaline battery segment is Duracel
As the scale of company’s lighting business improves, EBITDA margins can improve substantially from current levels ( currently at break even levels ). They can literally double their sales while maintaining their current distribution and sales expenses. Basically the cost base won’t rise much from here on. Incremental sales shall be margin accretive in a meaningful way
Disc: studying, not holding, not SEBI registered, posted only for educational purposes