Eveready Industries gains after robust Q2 earnings

Eveready Industries India rose 2.92% to Rs 150 at 15:30 IST on BSE after net profit surged 376.8% to Rs 17.64 crore on 11% increase in operating income to Rs 354.80 crore in Q2 September 2014 over Q2 September 2013.

The result was announced during trading hours today, 11 November 2014.

Meanwhile, the BSE Sensex was up 29.64 points, or 0.11%, to 27,904.37.

On BSE, so far 5.21 lakh shares were traded in the counter, compared with an average volume of 1.16 lakh shares in the past one quarter.

The stock hit a high of Rs 154.45 so far during the day, which is also a 52-week high for the counter. The stock hit a low of Rs 145.10 so far during the day. The stock hit a 52-week low of Rs 25.15 on 12 November 2013.

The stock had outperformed the market over the past one month till 10 November 2014, rising 43.17% compared with 6% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 52.62% as against Sensex's 10.05% rise.

The small-cap company has an equity capital of Rs 36.34 crore. Face value per share is Rs 5.

Eveready Industries India's operating EBITDA (earnings before interest, taxes, depreciation and amortization) rose 44.10% to Rs 37.03 crore in Q2 September 2014 over Q2 September 2013.

During the quarter, turnover grew by 11% despite volumes of the main categories of batteries and flashlights remaining flat on account of poor monsoon in the seasonal months for these products. The growth was the result of price increases of batteries during the current year and a 28% growth in the new category of lighting products, the company said in a statement.

The company had implemented a fresh round of price increases in batteries during the first quarter of the current quarter. The market absorbed the same. Though the volumes remained flat, due to poor monsoon, as explained above, battery operations remained healthy and contributed to the EBIDTA margin expanding to 10.4% during the current quarter from a 8.0% level in the same quarter of the previous year, the company said.

Reduction in Finance Costs from Rs 10.12 crore in the same quarter of the previous year to Rs 7.93 crore in the current quarter also contributed to the higher profits in the current period.

The new initiatives undertaken for specifically addressing electrical outlets for distribution of the company's lighting products was getting gradually entrenched and are reflected in the growth in this category, the company added.

The company persisted with higher visibility in its marketing efforts, comprehensively show-casing its new product basket.

The company said that its outlook appears to be stable.

Eveready is the country's market leader of batteries and flashlights - selling more than 1.2 billion batteries and 25 million flashlights. Apart from these, Eveready now offers a basket other products. Most of these products have been launched in the recent past and include lanterns, radios, rechargeable fans, power back up for mobile phones, LED, CFL & GLS lamps & other lighting products and packet tea. Eveready has an extensive distribution network of 3000 distributors reaching all the way down to 5000 population towns. The company is basing its growth on the new products -- especially the various lighting products and devices.

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