At its peak, imports were at about 300 million units, which was about two to three years back. It was eating into the organised battery segment, said Khaitan.
But then BIS was implemented last September-October and the benefits started flowing from around December last year. The industry had also pushed for an anti-dumping duty, which did not happen and then turned its focus on BIS implementation.
In the pre-Covid-19 months of January-February, the battery category for Eveready was growing at 13-14 per cent, which was impacted in March-April due to the nationwide lockdown imposed to contain the spread of Covid-19.
“From May onwards, we started getting back to stable numbers and in the last quarter batteries grew at 7 per cent in volume,” said Khaitan. Battery volumes were up in the first quarter, as well.
Eveready has a 52 per cent share in the dry cell battery market and is reaping the benefits of reduced imports. In flashlights, where Eveready has a 75 per cent share of the organized market, BIS has not been implemented, but it has benefited from the break in supply chain for the unorganised segment due to Covid.
In the quarter ended September, it posted its highest ever net profit without any other income at Rs 58.02 crore, an increase of 216 per cent, year-on-year. EBIDTA margins at 20.3 per cent were also the best ever. Battery margins were at 31.1 per cent on a turnover of Rs 239.6 crore.
Khaitan explained that the margins were a result of an all-round cost conservation due to Covid-19. “We took systematic price increase to pass on the increase in zinc prices and rupee depreciation. A better product-mix also helped as the higher value batteries sold well,” he said.
Demand for batteries has been buoyant. Eveready is adding a new AAA line. “This is after 6-7 years that a new AAA line is being set up,” said Khaitan.
Eveready set up a plant in Assam nearly three-four years back for fiscal benefits, but did not need the capacity at that point in time. That plant is now running at full capacity.
Eveready – which has a rural focus – is servicing the demand through its dealers and supervision is remote.
Eveready has close to a 1,000 vans and its distribution reach is a million outlets directly and indirectly about four million outlets.
The distribution network is being leveraged for test-marketing a detergent, SoKlin. The detergent is being test-marketed as part of the joint venture with Wings group.
Eveready had formed a joint venture with Indonesia-based Universal Wellbeing, part of the Wings group in 2018. Eveready has a 30 per cent stake in the joint venture. “Our focus is to extend the distribution network and their focus is product development, marketing and choice of product,” said Khaitan.
The product is being piloted in West Bengal and Tamil Nadu. “Due to Covid things got delayed. We are now in the pilot phase for this product and will take a call after a few months,” he said.
Imports reduced from 85 million in April-September 2019 to 20 million in April-September 2020
Eveready’s battery volumes grew by 13-14 per cent in January
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.