The Hindu Business Line : Eveready Industries back in black

Kolkata, April 28 Eveready Industries Ltd is back in the black in 2008-09 with a net profit of Rs 19.40 crore (net loss of Rs 19.32 crore in 2007-08).

The net sales during the year were Rs 857.33 crore (Rs 847.17 crore) due to lower excise burden.

During the fourth quarter ended March 31, 2009, the company’s net sales amounted to Rs 204.20 crore (Rs 193.20 crore) and PAT Rs 5.59 crore (loss of Rs 6.52 crore).

Mr Deepak Khaitan, Vice-Chairman, Eveready, attributed the improvement to several factors such as cost control, shutdown of Hyderabad plant, which was producing D-type batteries, and healthy growth in flashlight business.

“The closure of the Hyderabad plant alone has entailed a saving of about Rs 600 crore,” Mr Khaitan said. On how about 25 acres of the closed plant was going to be used, he said “we may develop the land ourselves.”

Growth hope

Addressing newspersons here, Mr Khaitan was optimistic over the prospects of the current year and expressed hope that the company would post 15 to 20 per cent growth.

This should be possible because, as he explained, CFL and GLS lamp business was poised for a growth (“an estimated Rs 100 crore of business in 2009-10 as compared to Rs 50 crore in 2008-09”).

Packet tea business too was expanding and flashlight business, with the launch of Homelight brand, would grow. The full effect of excise duty relief too would be felt in the current fiscal. “Eveready is now on a growth path,” he said.

Battery business

The share of battery business in the company’s total turnover, Mr Khaitan pointed out, would gradually decline to 45 per cent in three years from 70 per cent or so.

Also, debt burden, which dropped to Rs 300 crore in 2008-09, would drop by another Rs 100 crore in the current fiscal, he said.

Emphasising the need for building brands for packet tea business, CFL and GLS lamps and flashlights, the Vice-Chairman indicated that the company was going to spend heavily on advertisements – an estimated Rs 40-45 crore.

“We will also participate in T-20 tournament in June,” he said, adding that the company had not advertised for two years.

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