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Backed by healthy re-stocking in its sales channels following the implementation of the Goods and Services Tax (GST), Eveready Industries Ltd (EIL) posted a 42 per cent jump in net profit to Rs 36.35 crore with a nine per cent surge in its operating income at Rs 398.25 crore, for the quarter ended September 31, 2017
In the third quarter of the last fiscal year, the company's net profit stood at Rs 25.62 crore while its sales revenue was registered at Rs 384.73 crore. However, adjusted in accordance to the revised accounting procedures in the GST era, EIL's income during July-September period of 2016 stood at Rs 384.73 crore.
Battery volumes grew by seven per cent keeping with this recovery. However, prices of input material commodities like zinc was significantly higher as compared to the same period in previous year, resulting in margin erosion of about two per cent. Nevertheless, the impact was partially offset by favourable impact from the rupee exchange rate.
In a statement, the company said its battery margins have been impacted on account of withdrawal of fiscal benefits granted by Uttarakhand at its Hardwar unit. To make up for the loss of such benefits, EIL had set-up a greenfield unit at Assam.
"However, this unit is yet to avail such benefit, as the government has not issued the relevant notification for such tax free zones under the GST regime", it said adding that consequential price adjustments in batteries, as necessary, may need to be made to alleviate such impact.