Eveready Industries Sees Higher Sales, Trims Losses In Q4FY13

Eveready Industries India (EIIL), a Kolkata-based company which has major interests in marketing dry cell batteries and flashlights, has posted its Q4FY13 and consolidated year end results. The bottomline has held up the financial performance of the company, as it managed to reduce its previous year's losses by Rs 84 crore to Rs 2.15 in Q4FY13 from Rs 97.5 crore in Q4FY12.

On a standalone basis, its revenues stood at Rs 227.8 crore, showing a muted growth of 1.6% from that in the previous year's corresponding quarter. Its consolidated topline for FY13, though, has declined by 5% to Rs 1051 crore. During this period, EIIL's sales outside India have declined by as much as 73% to Rs 39 crore, which has impacted its overall revenues. The sales in India showed a rose 5% compared with that in FY12.

EIIL has done well to cut down its operating expenses in FY13. Its employee expenditure reduced 22% to Rs 90 crore YoY, in addition to a reduction of Rs 41 crore in its Other Expenses. However, the consumption of raw material has increased by 10% in FY13 to Rs 197 crore on consolidated basis.

Following the reduction in overall expenses, the company’s consolidated EBITDA for FY13 stood at Rs 385.5 crore, up by 18% on a yearly basis. The net profit for EIIL for the fiscal touched Rs 5 crore against a loss of Rs 88 crore in the last year.

Further, due to the increase in interest expenses on borrowings, its net margins were impacted and stood at just 0.48%. The operating margin was up by 708 basis points in FY13.

Certainly, the company’s consolidated performance for FY13 is not comparable with its FY12 numbers, as the performance of its subsidiary Novener SAS has not been included in this report due to its liquidation phase. Although EIIL has tried to recover from its losses by reducing its operating expenses, we advise investors to avoid this scrip and wait for better performance by the company.