Eveready Industries India on Wednesday reported a robust jump in its consolidated net profit for the first quarter of fiscal 2021 to Rs 25 crore from Rs 6.9 crore in the year-ago period, mainly on account of better operating performance led by improved margins.
Consolidated revenue during the period fell 20.5 percent to Rs 263.4 crore from Rs 331.2 crore, YoY. This fall was attributable to non achievement of optimal sales during April 2020 consequent to a complete stoppage / disruption of economic activities during the initial phases of the countrywide lockdown, the company said.
"Despite the lower turnover, gross margin was at par with that of the previous year due to a better turnover mix towards the more profitable segments of batteries and flashlights. Though the battery and flashlight turnover was also in the negative territory, the impact for these segments was lower in comparison to the other segments of lighting and appliances," Eveready Industries said in an exchange filing.
Operating performance in Q1FY21 improved as consolidated EBITDA rose 65 percent to Rs 41.3 crore from Rs 25 crore in Q1FY20 due to an improved gross margin, lower employee cost, lower distribution cost, lower promotional spends and lower overheads.
Consolidated EBITDA margin expanded to 15.7 percent from 7.6 percent, YoY.
"The discontinuance of the packet tea business further helped the Company in improving margin and releasing working capital," it added.
The company’s core categories of batteries and flashlights, however, are witnessing a healthy demand, given the sharp decrease in dumped imports from China and the disruptions caused to the unorganized market for non-availability of supplies.
Going ahead, it said that the situation in the battery segment should continue to look positive as full effect of the implementation of the BIS standards comes into force.
The flashlight segment is also likely to benefit as many of the unorganized gray market players may have been adversely impacted by cash flow constraints arising out of economic disruption. Furthermore, Government initiatives on restricting imports from China are likely to benfit both the segments, it added.
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