Eveready posts loss in March quarter, begins steps for ‘quick’ recovery
The country’s largest dry cell battery maker, Eveready Industries India, reported a net loss of Rs 38.41 crore on a consolidated basis in the quarter ended March 31, due to lower demand and the increase in the cost of inputs.
A year ago, the company recorded a net loss of Rs 442.53 crore, but due to one-time provisioning for outstanding intercompany deposits and the write-off of capital advances on a land transaction.
In its filing with the exchanges, the company said the quarter continued to see falling demand across all categories as inflation was high. In addition, very large increases in input costs due to supply chain disruptions and overall inflationary pressures have had a significant impact on margins and the price increases taken to compensate for this have led to market resistance, a said the company.
Additionally, the flashlight category suffered due to dumped imports from China.
Revenue from operations in the March quarter stood at Rs 241.24 crore compared to Rs 272.63 crore a year ago.
Eveready said the quarter and year were also impacted due to one-time provisioning made as a precaution, for certain disputed receivables and inventory, and due to restructuring costs, totaling Rs 27 crore. and communications and consulting costs of Rs 18 crore compared to the comparable quarter of last year.
However, for a “quick” recovery, Eveready said several steps have been taken, including debottlenecking legacy inefficiencies in the organizational structure and bringing Bain & Company on board for advice on improving operational efficiency. and strategy.
In January, Eveready tapped the consultancy to help identify a profitable business strategy and execute it.
The company also activated cost rationalization initiatives to offset some of the inflationary impact.
Eveready is also going through a change of control process. The Burman Group announced in February an open offer for an additional 26% in Eveready and its intention to take control of it. A few days later, members of the Khaitan family resigned from the board.
But sources said the open offer for Eveready has yet to gain approval from the Securities and Exchange Board of India (Sebi). The opening date of the offer according to the provisional schedule was April 26.
However, Burman Group entities are buying shares on the open market pursuant to a 5.26% buy order placed with its stockbroker, JM Financial Services, on Feb. 28. The purchase order for the acquisition of shares of Everready and the intention to take control had triggered the open offer in accordance with Sebi’s Takeover Bid Rules.
According to an exchange filing, Burman Group’s stake after acquiring shares on April 25 was 20.68%. At the time of the announcement of the open offer, the Burman Group’s stake was 19.84%.