Eveready Industries India has recorded a net profit of Rs 50.43 crore in the quarter ended December, on the back of an increase in turnover growth of batteries and flashlights with higher gross margins due to price increases and volume growth.
In the same period last year, net profit stood at Rs 90.60 crore, which had however, included an exceptional gain of Rs 89.55 crore from sale of land in Chennai.
Profit before tax before exceptional items in the December quarter increased by 183 per cent to Rs 61.14 crore from Rs 21.58 in the year ago period.
Amritanshu Khaitan, managing director, Eveready, said that the profitability in the first nine months of the year has been the highest ever for the company.
Without the exceptional gain, net profit in Q3 2019-20, would have been Rs 15-16 crore, Khaitan explained.
Apart from high gross margins due to price increases and volume growth, cost conservation has been adopted all levels.
Sequentially, however, net profit was marginally down from Rs 58.02 crore in the September quarter to Rs 50.42 crore in the December quarter on account of seasonality.
Eveready’s operating income in the third quarter stood at Rs 340.28, an increase of seven per cent in the same quarter last year.
The turnover for the quarter registered growth primarily led by an increase in turnover for the battery and flashlight segments; the turnover growth for batteries and flashlights during the quarter was at 9.4 per cent and 15.3 per cent, respectively.
As the economy opened up completely, a sustained demand for batteries was observed as the market continued to witness a sharp reduction in dumped battery imports from China, post-implementation of quality standards issued by Bureau of Indian Standards (BIS), the company said.
Even flashlights registered consistent demand in keeping with the enhanced agricultural activity and a sharp economic upturn during the quarter, it added.
As a result, EBIDTA margin for the battery segment was at 27 .5 per cent on a turnover of Rs 214 crore during the quarter, coupled with upward pricing revisions taken to mitigate the impact of higher commodity prices and rupee depreciation. The segment of flashlight also had a margin of 20.6 per cent during the quarter on a turnover of Rs 39.3 crore.