Eveready Ind reports Q4 loss at Rs 441 cr

Eveready Industries posted a standalone net loss of Rs 441.19 crore in Q4 FY21 compared with net loss of Rs 63.73 crore in Q4 FY20.

Revenue from operations increased 21.6% to Rs 272.63 crore in Q4 FY21 over Q4 FY20. Eveready said the turnover for the quarter registered a growth of 22% albeit on a lower base resulting from a subdued March turnover last year - as all the segments registered growth. Volumes also grew across all the segments during the quarter.

The battery maker registered an exceptional loss of Rs 629.70 crore in Q4 FY21. Exceptional items consist of provision for outstanding amounts of inter-corporate deposits and recoverables, write-off for interest accrued on such deposits and recoverables and write-off for outstanding capital advance as on 31 March 2021.

The company's pre tax loss stood at Rs 636.70 crore in Q4 FY21 compared with profit before tax of Rs 78.78 crore in Q4 FY20. Operating EBITDA jumped 43% to Rs 40.99 crore in Q4 FY21 as against Rs 28.67 crore in Q4 FY20. EBITDA margin improved to 15% in Q4 FY21 compared with 12.8% in Q4 FY20.

The battery manufacturer reported a net loss of Rs 309.13 crore in the year ended March 2021 (FY21) compared with net profit of Rs 179.57 crore in the year ended March 2020 (FY20). Revenue from operations increased 3.1% to Rs 1248.98 crore in FY21 over FY20.

The company's core categories of batteries and flashlights continues to witness a steady demand, given the sharp decrease in dumped imports from China and an overall strong demand in expectation of a near-normal monsoon. Eveready 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. Furthermore, proliferation of various battery-operated medical equipments 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.

The company has taken price increase of around 4-5% in batteries from May 2021 to counter sharp increase in raw material costs. Similar pricing actions have been taken in the flashlight segment as well. These actions should mitigate any adverse impact on margins. The lighting segment could partially recover from a weak consumption demand and supply constraints arising out of the pandemic. The situation is likely to improve in the forthcoming quarters as normalcy is restored in demand and as supply sources are stabilized. Once normalcy is restored in the supply chain, the company would be able to augment itsturnover through its various channels of distribution.

Given the outlook, the company is expected to maintain high operating margins in the forthcoming years.

Shares of Eveready Industries were up 6.91% at Rs 335.85 on BSE.

Eveready is the country's market leader of batteries and flashlights - selling more than 1.3 billion batteries and nearly 21 million flashlights. Apart from these, Eveready offers a basket of other products - LED, LED based Luminaires, GLS lamps & other lighting products and appliances. Eveready has an extensive distribution network of 4000 distributors reaching all the way down to 5000 population towns.

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