Eveready Industries Q1 consolidated net profit up 21% to Rs 30.13 cr

Batteries and flashlights maker Eveready Industries India Ltd on Tuesday reported a 21 per cent increase in consolidated net profit at Rs 30.13 crore in the first quarter ended June 30.

The company had posted a consolidated net profit of Rs 24.99 crore in the same period last financial year, Eveready Industries India said in a regulatory filing.

Consolidated total income during the period under review stood at Rs 283.04 crore as against Rs 275.13 crore in the year-ago quarter, the company said.

During the quarter, the turnover was higher due to "robust pent-up demand in June as the economy started to open up from lockdown like restrictions imposed in the earlier part of the quarter to counter the second surge of the pandemic", it said.

 

"However, the turnaround in June could not entirely offset the lockdown related disturbances In the supply chain during the earlier months," the company added.

The performance of the battery and flashlight segments remained relatively unaffected despite the second surge of the pandemic, it said, however adding demand in the appliance segment remained muted during the quarter as consumers continued to curb non-essential purchases in the midst of the pandemic.

The battery segment also gained as imports of cheap chinese batteries remained low following the implementation of quality standards issued by the Bureau of Indian Standards (BIS), the company said.

Eveready Industries India said price increases taken in the battery and flashlight segments to mitigate sharp raw material cost increases and impact of rupee depreciation aided turnover.

On the outlook, the company said," 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."

Moreover, the proliferation of various battery-operated medical equipment should add filip to battery demand.

The flashlight segment is also likely to remain steady as the rural economy revives from the adverse impact of the pandemic. Increased focus on rechargeable flashlights is also likely to benefit the segment, it added.

Eveready said its lighting segment could partially recover from a weak consumption demand as the economy started to open up towards the end of the quarter from lockdown restrictions. The situation is likely to improve further in the forthcoming quarters as the economy returns to normalcy and there is a revival of demand.

However, the small home appliances category is yet to reach scale due to overall weak demand. The current COVID-19 situation is expected to impact demand for the category in the near term as consumers are likely to curb discretionary spending over essential purchases, it said.

In the medium to long term, with growing disposable incomes and the government's initiative towards rural electrification, this category is expected to improve, the company said.