May 10, 2016: In the fourth quarter, Eveready Industries witnessed a feeble revenue growth owing to subdued customer demand in battery market and rural segment, together with de-growth in flashlight and cheap imports from China. But, the company reported a significant growth in LED lighting division with a 45% growth in FY16.
Amritanshu Khaitan, the MD of Eveready India said that the LED lighting division will continue to grow better as compared to other divisions of the company. Eveready had acquired a Rs 50 crore LED project from the government of Madhya Pradesh and is aiming to double LED sales to Rs 250 crore in 2017, he added.
Eveready to double LED sales in 2017
Eveready will sell about 25-30 million divisions of LED lights in FY17, informed Khaitan. Around 10% of the Indian market has moved towards cheap Chinese batteries and even though the trade has been increasing at 8-10%, the organised industry has missed out on this development, according to him.
The organised industry is expecting that the government will inflict anti-dumping duty on batteries within a month or two. Hence, up till now the Q1FY17 might see a subdued expansion with regards to battery volumes however, sturdy monsoons and government actions might view a strong second half in FY17, Khaitan added.
He also said that the Chinese batteries are duplicated somewhere between Rs 0.75 to Rs 1.25 and this is way low than the cost of raw materials. Referring to capex plans, he said that the company is not looking at capex for LED division and will most likely carry on with the asset-like model.
Nonetheless, Eveready is planning a huge capex for the battery trade to the tune of Rs 100 crore for which the company would be setting up a 400-million factory in Assam, he added.
He also said that the LED prices have reduced significantly over the last few months by almost 35-40%. Referring to the outlook for margins, he said that the company is aiming to reach 9.5-10% margins in FY17.